Request From States for Removal of Gasoline Volatility Waiver, 14760-14775 [2024-04023]
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14760
Federal Register / Vol. 89, No. 41 / Thursday, February 29, 2024 / Rules and Regulations
(F) The permit conditions and
systems to receive special protection
will be determined by the local Federal
fisheries manager in consultation with
ADF&G.
(xix) The Klawock River drainage is
closed to the use of seines and gillnets
during July and August.
(xx) The Federal public waters in the
Makhnati Island area, as defined in
§ ll.3(b)(5) are closed to the harvest of
herring and herring spawn, except by
federally qualified users.
(xxi) Only federally qualified
subsistence users may harvest sockeye
salmon in Neva Lake, Neva Creek, and
South Creek.
(xxii) The Federal public waters of
Kah Sheets Creek are closed from July
1 to July 31, except by federally
qualified users.
Amee Howard,
Acting Assistant Regional Director, U.S. Fish
and Wildlife Service.
Gregory Risdahl,
Subsistence Program Leader, USDA–Forest
Service.
[FR Doc. 2024–04056 Filed 2–28–24; 8:45 am]
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ENVIRONMENTAL PROTECTION
AGENCY
211130
221210
324110
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325199
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447110, 447190
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493190
DATES:
40 CFR Part 1090
This rule is effective on April 29,
2024.
[EPA–HQ–OAR–2022–0513; FRL–9845–02–
OAR]
RIN 2060–AV73
Request From States for Removal of
Gasoline Volatility Waiver
Environmental Protection
Agency (EPA).
ACTION: Final rule.
AGENCY:
Pursuant to provisions
specified by the Clean Air Act (CAA),
the Governors of Illinois, Iowa,
Minnesota, Missouri, Nebraska, Ohio,
South Dakota, and Wisconsin submitted
petitions requesting that EPA remove
the 1-pound per square inch (psi) Reid
vapor pressure (RVP) waiver for summer
gasoline-ethanol blended fuels
containing 10 percent ethanol (E10).
EPA is acting on those petitions by
removing the 1-psi waiver in those
States effective April 28, 2025. This
action also finalizes regulatory
amendments to implement the removal
of the 1-psi waiver for E10 in those
States, as well as a regulatory process by
which a State may request to reinstate
the 1-psi waiver. Finally, consistent
with a decision issued by the United
States Court of Appeals for the D.C.
Circuit on July 2, 2021, this action
removes regulations that extended the 1psi waiver to gasoline-ethanol blends
SUMMARY:
NAICS 1 code
between 10 and 15 percent ethanol
(E15).
EPA has established a
docket for this action under Docket ID
No. EPA–HQ–OAR–2022–0513. All
documents in the docket are listed on
the https://www.regulations.gov
website. Although listed in the index,
some information is not publicly
available, e.g., confidential business
information (CBI) or other information
whose disclosure is restricted by statute.
Certain other material is not available
on the internet and will be publicly
available only in hard copy form.
Publicly available docket materials are
available electronically through https://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For
questions regarding this action, contact
Lauren Michaels, Office of
Transportation and Air Quality,
Compliance Division, Environmental
Protection Agency, 2000 Traverwood
Drive, Ann Arbor, MI 48105; telephone
number: (734) 214–4640; email address:
michaels.lauren@epa.gov.
SUPPLEMENTARY INFORMATION:
ADDRESSES:
Does this action apply to me?
Entities potentially affected by this
final rule are those involved with the
production, distribution, and sale of
transportation fuels, including gasoline
and diesel fuel. Potentially affected
categories include:
Examples of potentially affected entities
Natural gas liquids extraction and fractionation.
Natural gas production and distribution.
Petroleum refineries (including importers).
Butane and pentane manufacturers.
Ethyl alcohol manufacturing.
Manufacturers of gasoline additives.
Petroleum bulk stations and terminals.
Petroleum and petroleum products wholesalers.
Fuel retailers.
Other fuel dealers.
Natural gas liquids pipelines, refined petroleum products pipelines.
Other warehousing and storage—bulk petroleum storage.
American Industry Classification System (NAICS).
This table is not intended to be
exhaustive, but rather provides a guide
for readers regarding entities likely to be
affected by this action. This table lists
the types of entities that EPA is now
aware could potentially be affected by
this action. Other types of entities not
listed in the table could also be affected.
To determine whether your entity
would be affected by this action, you
should carefully examine the
applicability criteria in 40 CFR part
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1090. If you have any questions
regarding the applicability of this action
to a particular entity, consult the person
listed in the FOR FURTHER INFORMATION
CONTACT section.
Table of Contents
I. Executive Summary
II. Volatility Control Background and History
III. Statutory Authority and Provisions To
Remove the 1-psi Waiver
IV. Petitions for Removal of the 1-psi Waiver
and Supporting Documentation
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A. Petition Background and History
B. Evaluation of Petitions for Removal of
the 1-psi Waiver
V. Fuel System Impacts
A. Production
B. Distribution
C. Retail Operations
VI. Implementation and Effective Date
A. Statutory Provisions
B. Finding of Insufficient Supply for 2024
and Renewal of Extension of Effective
Date
VII. Cost and Price Impacts
VIII. Associated Regulatory Provisions
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A. New Designation and Associated PTD
Language
B. Regulatory Reinstatement Mechanism
IX. Removal of the 1-psi Waiver for E15
A. Background
B. Affected Provisions
X. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 14094: Modernizing Regulatory
Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act
(UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
G. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
H. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
I. National Technology Transfer and
Advancement Act (NTTAA) and 1 CFR
Part 51
J. Executive Order 12898: Federal Actions
To Address Environmental Justice in
Minority Populations and Low-Income
Populations
K. Congressional Review Act (CRA)
I. Executive Summary
In this action, EPA is responding to
petitions from eight State Governors to
remove the 1-psi (pound per square
inch) waiver for gasoline-ethanol blends
containing 10 percent ethanol (E10).
The Governors made their requests
pursuant to Clean Air Act (CAA) section
211(h)(5), which provides that EPA
shall remove the 1-psi waiver by
regulation upon a demonstration by a
Governor that the 1-psi waiver increases
emissions in their State.
After review of the modeling results
presented by the Governors in their
petitions, on March 6, 2023, EPA
proposed to remove the 1-psi waiver
with an effective date of April 28,
2024—and sought comment on delaying
the effective date to April 28, 2025—in
the following eight States: Illinois, Iowa,
Nebraska, Minnesota, Missouri, Ohio,
South Dakota, and Wisconsin.1 On
March 21, 2023, EPA held a public
hearing on the proposal, at which
various perspectives on the proposed
action were presented, and
subsequently many comments were
submitted to EPA on the proposed
action. After the close of the public
comment period, EPA also received
numerous petitions to delay the
proposed effective date of the removal
of the 1-psi waiver.2 Following review
1 88
FR 13758.
refer to these petitions as ‘‘extension
petitions’’ throughout this preamble.
2 We
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of public comments on the proposal and
the extension petitions received, in this
action EPA is removing the 1-psi waiver
and instead applying the 9.0 psi RVP
(Reid Vapor Pressure) standard under
CAA section 211(h)(1) effective April
28, 2025, in the following eight States:
Illinois, Iowa, Nebraska, Minnesota,
Missouri, Ohio, South Dakota, and
Wisconsin.
Throughout this document we discuss
key comments provided by stakeholders
on the proposal and provide our
response. Additional detail is provided
in the Response to Comments (RTC)
document and Technical Support
Document (TSD) 3 for this action.
II. Volatility Control Background and
History
EPA first took regulatory action to
control the volatility of gasoline in
1987.4 Because higher gasoline volatility
leads to higher evaporative emissions,
EPA regulates the RVP—a measure of
fuel volatility—of gasoline during
summer months in order to reduce
volatile organic compound (VOC)
emissions that contribute to the
formation of smog (ground-level
ozone).5 The volatility of fuel depends
on the refinery’s decisions in
formulating its gasoline. Subsequent to
EPA’s actions, Congress enacted the
CAA Amendments of 1990, which
included statutory volatility provisions
for summer gasoline. These provisions
largely codified EPA’s regulatory
approach, including establishing a 9.0
psi RVP standard for gasoline volatility
in the summer.6 Because blending
3 ‘‘Request From States for Removal of Gasoline
Volatility Waiver: Technical Support Document and
Cost Analysis,’’ available in the docket for this
action.
4 See 52 FR 31274 (August 19, 1987); Subsequent
regulatory actions occurred in 1989 and 1990. 54 FR
11868 (March 22, 1989); 55 FR 23658 (June 11,
1990).
5 Gasoline must have volatility in the proper
range to prevent driveability, performance, and
emissions problems. If the volatility is too low, the
gasoline will not ignite properly; if the volatility is
too high, the vehicle may experience vapor lock.
Importantly for this action, excessively high
volatility also leads to increased evaporative
emissions from the vehicle. Vehicle evaporative
emission control systems are designed and certified
on gasoline with a volatility of 9.0 psi RVP. Higher
volatility gasoline may overwhelm the vehicle’s
evaporative control system, leading to a condition
described as ‘‘breakthrough’’ of the cannister and
mostly uncontrolled evaporative emissions.
6 CAA section 211(h)(1). CAA section 211(h)(1)
requires EPA to establish volatility requirements—
that is, a restriction on RVP—during the high ozone
season. To implement these requirements, EPA
defines ‘‘high ozone season’’ or ‘‘summer season’’
at 40 CFR 1090.80 as ‘‘the period from June 1
through September 15 for retailers and wholesale
purchaser consumers, and May 1 through
September 15 for all other persons, or an RVP
control period specified in a state implementation
plan if it is longer.’’ In general practice by industry
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ethanol into gasoline increases the
volatility of the resulting fuel blend due
to chemical differences between ethanol
and gasoline, Congress also codified a 1psi waiver for E10, allowing such blends
to have a 1.0-psi higher RVP than
otherwise allowed for gasoline,
consistent with EPA’s prior regulatory
approach.7 This allowance only applies
to gasoline-ethanol blends containing
between 9 and 10 percent ethanol, and
does not extend to gasoline-ethanol
blends containing greater than 10
percent ethanol.8 The 1-psi waiver also
does not apply to reformulated gasoline
(RFG).
At the time the provision was
enacted, the 1-psi waiver applied to a
relatively small portion of the gasoline
sold in the United States. Today,
however, almost all gasoline sold is E10,
and thus the 1-psi waiver increases the
volatility of most gasoline.
On April 28, 2022, the Governors of
Illinois, Iowa, Kansas, Minnesota,
Nebraska, North Dakota, South Dakota,
and Wisconsin submitted a petition for
the removal of the 1-psi waiver for E10
in their States beginning in the summer
of 2023, pursuant to CAA section
211(h)(5).9 On June 10, 2022, the
Governor of Ohio also submitted a
petition requesting the removal of the
1-psi waiver in that State.10 On July 21,
2022, the Governor of Kansas notified
EPA that they were rescinding their
petition for removal of the 1-psi waiver
in Kansas.11 On October 13, 2022, the
Governor of North Dakota notified EPA
that they were rescinding their petition
for removal of the 1-psi waiver in North
Dakota.12 On December 21, 2022, the
Governor of Missouri submitted a
petition requesting the removal of the
1-psi waiver in that State.13 This action
refers to the eight remaining States of
Illinois, Iowa, Minnesota, Missouri,
Nebraska, Ohio, South Dakota, and
Wisconsin as the ‘‘petitioning states.’’
The petitions included modeling results
indicating reductions in VOCs, nitrogen
and for purposes of this preamble, the high ozone
season is referred to as the ‘‘summer’’ or ‘‘summer
season’’ and gasoline produced to be used during
the high ozone season is called ‘‘summer gasoline.’’
EPA’s regulations do not impose any volatility
requirements on any type of blend of gasoline
outside of the summer season.
7 CAA section 211(h)(4).
8 The statutory 1-psi waiver is codified at 40 CFR
1090.215(a).
9 ‘‘April 28, 2022 Letter from Eight States,’’
available in the docket for this action.
10 ‘‘June 10, 2022 Letter from Ohio,’’ available in
the docket for this action.
11 ‘‘July 21, 2022 Letter from Kansas,’’ available in
the docket for this action.
12 ‘‘October 12, 2022 Letter from North Dakota,’’
available in the docket for this action.
13 ‘‘December 21, 2022 Letter from Missouri,’’
available in the docket for this action.
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oxides (NOX), and carbon monoxide
(CO).
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III. Statutory Authority and Provisions
To Remove the 1-psi Waiver
This rulemaking modifies EPA’s fuel
quality regulations in 40 CFR part 1090
to remove the 1-psi waiver that is
applicable to fuel blends containing
gasoline and 10 percent ethanol for the
petitioning States. While we proposed
to make such a change effective for the
summer of 2024, after further careful
consideration of comments and
consultation with various agencies we
are instead finalizing removal of the
1-psi waiver in these States beginning
April 28, 2025.
CAA section 211(h)(1) requires EPA to
‘‘promulgate regulations making it
unlawful . . . during the high ozone
season . . . to sell . . . or introduce into
commerce gasoline with a Reid Vapor
Pressure in excess of 9.0 pounds per
square inch (psi).’’ For nonattainment
areas, CAA section 211(h)(1) also allows
EPA to set a lower (i.e., more stringent)
RVP standard, as well as to define the
term ‘‘high ozone season.’’ CAA section
211(h)(4) provides in relevant part that
‘‘[f]or fuel blends containing gasoline
and 10 percent denatured anhydrous
ethanol, the Reid vapor pressure
limitation under this subsection shall be
one pound per square inch (psi) greater
than the applicable Reid vapor pressure
limitations established under [section
211(h)(1)].’’ CAA section 211(h)(5),
which was enacted as part of the Energy
Policy Act of 2005 (EPAct), provides in
relevant part that ‘‘[u]pon notification,
accompanied by supporting
documentation, from the Governor of a
State that the [waiver in section
211(h)(4)], will increase emissions that
contribute to air pollution in any area of
the State, the Administrator shall, by
regulation, apply, [the volatility limit
under section 211(h)(1)].’’ Thus,
regulatory action under CAA section
211(h)(5) would remove the 1-psi
waiver for E10 and generally apply the
RVP standard under CAA section
211(h)(1).
Prior to the April 28, 2022 petition, no
Governor had ever submitted a petition
under CAA section 211(h)(5) to EPA,
and thus we are interpreting this
statutory provision for the first time in
this action. In this context, we find that
the use of the prescriptive statutory
language ‘‘shall’’ provides limited, if
any, discretion for EPA to consider
other issues such as economic impacts
of removing the 1-psi waiver. Such
impacts may instead be taken into
consideration by a Governor when
deciding whether to submit a petition to
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EPA.14 Here, EPA’s role is only to
evaluate the supporting documentation
provided by the Governors.15 If EPA
concludes that the supporting
documentation, as required by the
statute, demonstrates emissions
increases with the 1-psi waiver in place,
then CAA section 211(h)(5) requires
EPA to promulgate regulations to
remove the 1-psi waiver as requested.
In response to the proposal, we
received comments suggesting that the
Governors cannot meet the statutory
criteria in CAA section 211(h)(5)
because E10 is now the dominant fuel
in the marketplace. Commenters
suggested that the statutory language
that the 1-psi waiver ‘‘will increase
emissions’’ cannot be satisfied, because
any emissions impacts from the 1-psi
waiver have already occurred. We
disagree with the comment. CAA
section 211(h)(5)(A)—which was
promulgated in 2005—requires EPA to
remove the 1-psi waiver if it ‘‘will
increase emissions that contribute to air
pollution . . . during the high ozone
season.’’ The term ‘‘will’’ connotes
consideration of emissions that are
expected in the future and as relevant
here during the ‘‘high ozone season.’’ 16
Further, as instructed in CAA section
211(h)(1), we have defined ‘‘high ozone
season’’ as the period from ‘‘June 1
through September 15 for retailers and
[whole purchaser consumers], and May
1 through September 15 for all other
persons.’’ 17 We therefore read the
phrase as calling for the consideration of
emissions that are expected in the
petitioning States during future high
ozone seasons and conclude that
because the Governors have
demonstrated that the 1-psi waiver will
increase VOC emissions during the high
ozone season, the statutory criteria for
removal of the 1-psi waiver has been
14 Considerations like this were cited by the
Governors of Kansas and North Dakota in
rescinding their petitions.
15 Legislative history suggests that the supporting
documentation need not be as stringent as that
called for under CAA section 211(c)(4)(C). See
Senate Report 106–426 at 12 (September 28, 2000).
Under CAA section 211(c)(4)(C) a state must make
a ‘‘necessity’’ showing prior to EPA approval of a
fuel measure into the state implementation plan.
The ‘‘Guidance on Use of Opt-in to RFG and Low
RVP Requirements in Ozone SIPs,’’ August 1997,
gives further guidance on factors EPA is likely to
consider in making a finding of ‘‘necessity’’ under
CAA section 211(c)(4)(C).
16 This reading is like, for example, our reading
of ‘‘will’’ in CAA section 110(a)(2)(D)(i). (The term
‘‘will’’ in CAA section 110(a)(2)(D) means that State
implementation plans are required to eliminate the
appropriate amounts of emissions that presently, or
that are expected in the future, contribute
significantly to nonattainment downwind. 63 FR
57375 (October 27, 1998)).
17 40 CFR 1090.80.
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met. We further address this comment
in the RTC document.
Additionally, as we posited in the
proposal, we do not interpret this
provision as requiring a demonstration
of a reduction in emissions of all
pollutants that contribute to air
pollution in the petitioning States, as
advocated for by some commenters.
Such a demonstration could not have
been contemplated by Congress, as
lowering the volatility of fuel was
specifically the intent set out in CAA
section 211(h)(1), which calls for EPA to
set RVP standards to address
‘‘evaporative emissions.’’ As such,
reducing the volatility of gasoline would
be expected to have differing impacts on
emissions of different pollutants.18
Further, Congress was silent on the air
pollutants that EPA should consider in
responding to petitions for removal of
the 1-psi waiver. Specifically, under
CAA section 211(h)(5), EPA is to remove
the 1-psi waiver if it ‘‘increase[s]
emissions that contribute to air
pollution.’’ This contrasts with, for
example, CAA section 110(a)(2)(D)(i),
which prohibits sources in a State from
emitting ‘‘any air pollutant which will
contribute significantly to
nonattainment’’ in another State. Air
pollution could result from a myriad of
sources, including listed hazardous air
pollutants, criteria pollutants, and
greenhouse gases, and thus would
appear to be a rather expansive term.
Reducing RVP, however, is a volatility
control measure as explained earlier in
Section II. In short, CAA section
211(h)(1) requires EPA to set RVP
standards to address ‘‘evaporative
emissions.’’ Additionally, EPA has
consistently explained that adding 10
percent ethanol to gasoline causes
roughly a 1.0 psi RVP increase in the
blend’s volatility, which is the premise
for the 1-psi waiver contained in CAA
section 211(h)(4) and the subject of this
action.19 EPA is of the view, therefore,
that it is reasonable to consider ‘‘air
pollution’’ emanating from emissions of
such gasoline and thus, that it may be
most appropriate to evaluate the impact
of the 1-psi waiver for E10 on VOC
emissions in addressing petitions to
remove the 1-psi waiver under CAA
section 211(h)(5). We thus find that
demonstration of increased VOC
emissions with the 1-psi waiver in place
is sufficient to grant the petitions for
18 For an example of analysis and modeling of
emission impacts available at the time CAA section
211(h)(5) was enacted, see ‘‘User’s Guide to
MOBILE6.1 and MOBILE6.2: Mobile Source
Emission Factor Model,’’ EPA–420–R–02–028,
October 2002.
19 See, e.g., 52 FR 31274 at 31292 (August 19,
1987).
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removal of the waiver. Even were EPA
to look at the modeled emissions
impacts on several other pollutants (e.g.,
CO and NOX), those reductions, in
addition to the reduction in VOCs, also
satisfy the requirements of the statute
and justify granting the petitions.
Further, EPA views the Motor Vehicle
Emissions Simulator (MOVES) as an
appropriate tool for use in modeling the
emission impacts required by CAA
section 211(h)(5). The MOVES runs
performed by the petitioning States
compared emissions from motor
vehicles and nonroad vehicles and
equipment with and without the 1-psi
waiver for E10 in each State in the
summer. In the past, similar analyses
have been used to support prior EPA
actions for Federal and State fuel
programs.20
IV. Petitions for Removal of the 1-psi
Waiver and Supporting Documentation
A. Petition Background and History
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During the fall of 2021, EPA received
several letters from States requesting
that EPA engage in a dialogue about
mechanisms to provide parity between
E10 and E15 with respect to gasoline
volatility standards.21 Specifically, the
letters referred to CAA section 211(h)(5)
and inquired about as to what type of
‘‘supporting documentation’’ should
accompany such a request. EPA
organized and participated in a series of
meetings with representatives from
various Midwestern States that had
expressed interest in removing the 1-psi
waiver. In those meetings, EPA
indicated that MOVES modeling would
be an appropriate tool to use for this
purpose given its ability to model the
emissions impacts of changes in
gasoline volatility and given our past
reliance on MOVES modeling runs in
similar contexts.
On April 28, 2022, the Governors of
Illinois, Iowa, Kansas, Minnesota,
Nebraska, North Dakota, South Dakota,
and Wisconsin submitted a joint
petition to EPA for the removal of the
1-psi waiver for E10 in their respective
States. The petition specifically
20 For example, on June 7, 2017, EPA published
a final rule to relax the federal 7.8 psi RVP standard
in the Nashville, TN area (82 FR 26354) and on
March 12, 2021, EPA published two final rules that
removed approved regulations from the Kansas and
Missouri SIPs that required the sale of 7.0 psi RVP
gasoline in the Kansas City, KS–MO area (86 FR
14000 and 86 FR 14007).
21 See ‘‘October 13, 2021 Letter from Kansas,’’ and
‘‘November 4, 2021 Letter from Seven States,’’
available in the docket for this action.
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requested the removal of the 1-psi
waiver for E10 as a permanent solution
for providing year-round E15 in those
States beginning in the summer of 2023.
As accompanying documentation, the
petition provided quantified reductions
in VOC, NOX, and CO emissions as a
result of removing the 1-psi waiver in
each State based on MOVES modeling.
Subsequent to this submittal, the
Governors of Kansas and North Dakota
rescinded their petitions to remove the
1-psi waiver for E10 in those States.22
Therefore, we are not taking any action
on the 1-psi waiver for E10 in Kansas
and North Dakota in this action.
On June 10, 2022, the Governor of
Ohio also submitted a petition
requesting the removal of the 1-psi
waiver for E10 beginning in the summer
of 2023. The petition provided
quantified reductions in VOC, NOX, and
CO emissions in Ohio based on MOVES
modeling.
On December 21, 2022, the Governor
of Missouri also submitted a petition
requesting the removal of the 1-psi
waiver for E10 beginning in the summer
of 2023. The petition provided
quantified reductions in VOC, NOX, and
CO emissions in Missouri based on
MOVES modeling.
Subsequent to submission of the
petitions, all petitioning States except
Missouri provided EPA with additional
emissions modeling documentation,
including for particulate matter (PM)
and benzene.23 The original data
22 See ‘‘July 21, 2022 Letter from Kansas,’’ and
‘‘October 12, 2022 Letter from North Dakota,’’
available in the docket for this action.
23 See ‘‘Emissions Impacts of the Elimination of
the 1-psi RVP Waiver for E10,’’ May 9, 2022; and
‘‘Emissions Impacts of the Elimination of the 1-psi
RVP Waiver for E10 in Ohio,’’ June 10, 2022,
available in the docket for this action. While we did
not receive additional information from Missouri
about other pollutants as we received from the other
petitioning states, we anticipate directionally
similar trends as shown in the information from the
other states. RVP reduction is a volatility control
measure and EPA has consistently explained that
adding 10 percent ethanol to gasoline causes
roughly a 1.0 psi RVP increase in the blend’s
volatility. As EPA explained in its rulemakings to
regulate volatility of fuel that preceded enactment
of CAA section 211(h), evaporative hydrocarbon
emissions are VOCs and contribute to the formation
of ozone in the atmosphere, particularly in the
summer months due to direct sunlight and high
ambient temperatures. EPA regulated the volatility
of gasoline to control the emissions of VOCs.
Congress, in enacting CAA section 211(h), which
largely codified EPA’s volatility regulations, thus
also logically intended to address VOCs by
requiring volatility controls. It is therefore
reasonable and most appropriate to evaluate the
impact of the 1-psi volatility waiver for E10 on VOC
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14763
submitted showed a decrease in VOC,
NOX, and CO emissions with removal of
the 1-psi waiver for E10, while the
additional data demonstrated an
increase in PM for both nonroad and onroad emissions with removal of the 1psi waiver. The benzene results
demonstrated an increase in benzene
on-road emissions and a decrease in
benzene nonroad emissions. While the
additional data on modeled emissions
impacts on other pollutants may not be
necessary to make the statutory
demonstration, it does provide
additional information about the
potential emissions impacts of this
action.
All the petitioning States requested
removal of the 1-psi waiver in all areas
within their State where the limitation
under CAA section 211(h)(4) applies.
Therefore, the requests did not include
areas within the States where RFG is
required because the 1-psi waiver does
not apply to RFG. The petitioning States
also requested that the removal of the 1psi waiver should take effect for the
2023 high ozone season, without further
discussion. The States noted that
rescinding the 1-psi waiver for E10
would support year-round sales of E15.
B. Evaluation of Petitions for Removal of
the 1-psi Waiver
The petitioning States provided
technical documentation with their
petitions to demonstrate the reduction
of emissions with the removal of the 1psi waiver as required by CAA section
211(h)(5) in the form of MOVES
modeling results.24 The results for each
State were based on a single day in July
2023, which is during the high ozone
season. Comparative results
demonstrate the change in emissions
from the current 10.0 psi RVP standard
to the alternative 9.0 psi RVP standard
as contemplated by the statute.25 A
summary of the emissions impacts of
removing the 1-psi waiver for E10 for
each State is provided in Table V–1.26
emissions in addressing petitions to remove the 1psi waiver under CAA section 211(h)(5). See also
52 FR 31274 (August 19, 1987); 54 FR 11868 (March
22, 1989); and 55 FR 23658 (June 11, 1990).
24 EPA developed MOVES to estimate air
pollution emissions from on-road and nonroad
mobile sources.
25 Further information about the MOVES runs,
including inputs and nonroad data, is available in
the docket for this action.
26 EPA’s evaluation of the MOVES model input
data and assumptions, and results, can be found in
the TSD.
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TABLE V–1—CHANGE OF MOBILE SOURCE EMISSIONS IN 2023 MOVES3.01 SOURCES FROM 10.0 psi TO 9.0 psi RVP
Pollutant/precursor
State
VOCs
(percent)
CO
(percent)
NOX
(percent)
PM2.5
(percent)
PM10
(percent)
Benzene
(percent)
Toluene
(percent)
¥0.9
¥1.8
¥2.7
¥0.66
¥2.6
¥1.6
¥2.9
¥1.7
¥0.19
¥0.44
¥0.52
¥0.41
¥0.48
¥0.45
¥0.53
¥0.44
¥0.05
¥0.09
¥0.09
¥0.14
¥0.09
¥0.13
¥0.06
¥0.10
0.09
0.14
0.15
N/A
0.17
0.30
0.08
0.21
0.10
0.15
0.16
N/A
0.18
0.32
0.08
0.22
¥0.2
¥0.1
¥1.3
N/A
¥0.6
0.08
¥1.1
¥0.3
¥1.5
¥3.3
¥4.2
N/A
¥4.4
¥2.8
¥4.8
¥2.7
Illinois ....................................................................
Iowa .......................................................................
Minnesota ..............................................................
Missouri .................................................................
Nebraska ...............................................................
Ohio .......................................................................
South Dakota ........................................................
Wisconsin ..............................................................
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As with the proposal, we have
assessed the supporting documentation
provided by the petitioning States and
find that the MOVES modeling results
submitted to EPA demonstrate a
reduction in emissions of multiple
pollutants (e.g., VOCs, CO, and NOX)
that contribute to air pollution within
each State upon removal of the 1-psi
waiver for E10, as required under CAA
section 211(h)(5).27 We note that the
same documentation also shows an
increase in emissions of other pollutants
such as PM. As discussed in Section III,
we do not interpret the statute as
requiring reductions in all pollutants.
Documentation of air pollutant
emissions reductions—particularly
VOCs—is sufficient. While some
commenters suggested that EPA should
not focus on particular pollutants and
ignore others, we instead conclude that
demonstration of a decrease in VOC
emissions is sufficient to satisfy the
statutory requirements and justify
granting the petitions.
Therefore, based on the Governors’
petitions and the supporting
documentation provided, we are
removing the 1-psi waiver for E10 sold
in the petitioning States and, as required
by CAA section 211(h)(5), promulgating
the 9.0 psi RVP standard contained in
CAA section 211(h)(1) for the
petitioning States. For the reasons
discussed in Section VIII., such a
change will be effective on April 28,
2025, given our determination of
insufficient supply in 2023 and the
renewal of that extension for one year
based on a determination of insufficient
supply in 2024.
27 Evaporative emissions from gasoline—
specifically VOCs—are precursors to the formation
of tropospheric ozone and contribute to the nation’s
ground-level ozone problem. NOX and CO can also
be ozone precursors. Exposure to ground level
ozone can reduce lung function (thereby
aggravating asthma or other respiratory conditions),
increase susceptibility to respiratory infection, and
may contribute to premature death in people with
heart and lung disease.
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V. Fuel System Impacts
In this section, we discuss the
potential impacts of removing the 1-psi
waiver in the petitioning States on the
fuel production and distribution system,
including impacts that would
potentially affect gasoline refineries,
pipelines, fuel terminals, retail outlets,
and, ultimately, consumers.28
Significant portions of this discussion
were provided in the proposal, and have
now been updated based on additional
information provided from commenters
and discussions with industry. We
received comment from ethanol
interests suggesting that gasoline supply
concerns were overstated and
manageable, even for 2023. We also
received comment and supporting
analysis from refining and pipeline
stakeholders expressing concern over
the gasoline supply and resulting cost
and price impacts in support of their
requests to further delay
implementation of the 1-psi waiver
removal, as well as additional petitions
requesting delay to 2025 or later. The
discussion in this section is not specific
to a particular year or determination of
sufficiency of supply. Section VI
provides our determination of
insufficient supply for 2024.
In short, this action will require a
lower-volatility conventional gasoline
before oxygenate blending (CBOB) 29 to
be produced by refineries and
distributed by pipelines and terminals,
resulting in a lower-volatility blended
28 Further detail on this topic is available in the
TSD.
29 Gasoline before oxygenate blending (BOB)
means gasoline for which a gasoline manufacturer
has accounted for oxygenate (e.g., denatured fuel
ethanol) added downstream. See 40 CFR 1090.90.
BOB is subject to all requirements and standards
that apply to gasoline under EPA’s fuel quality
regulations, and refineries typically formulate their
BOBs with the intent that it will be blended
downstream with ten percent ethanol content to
maintain compliance with EPA and industry
specifications. Conventional BOB (CBOB) is BOB
produced or imported for areas outside of RFG areas
otherwise known as conventional areas.
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Ethylbenzene
(percent)
¥0.9
¥2.1
¥3.0
N/A
¥2.9
¥2.0
¥3.4
¥1.8
Xylene
(percent)
¥0.9
¥2.1
¥3.1
N/A
¥3.0
¥2.0
¥3.3
¥1.8
fuel ultimately sold at retail outlets in
the petitioning States.30
We first note that volatility controls
for gasoline differ across various States
and regions within States. Summer
gasoline for use in the continental U.S.
must comply with either the Federal
RVP standard of 9.0 psi or the more
stringent RVP standard of 7.8 psi, unless
the summer gasoline is either for use in
an RFG covered area, is subject to
California’s gasoline regulations, or EPA
has waived preemption and approved a
State request to adopt a more stringent
RVP standard into a State
Implementation Plan (SIP). Most of the
U.S. utilizes ‘‘conventional gasoline,’’
for which the Federal RVP standard is
9.0 psi, with a 1.0 psi waiver for
gasoline blended with 10 percent
ethanol. There are also areas that utilize
conventional gasoline for which the
Federal RVP standard is 7.8 psi, and in
such regions, the 1.0 psi waiver also
applies for gasoline blended with 10
percent ethanol.31 Several States have
‘‘boutique’’ low-RVP fuel programs or
SIP programs 32 that allow the 1-psi
waiver for gasoline blended with 10
percent ethanol.33 Some boutique fuel
programs, or SIP-approved fuel
programs, however, disallow the 1-psi
waiver for gasoline blended with 10
percent ethanol and in those areas, such
gasoline must meet the applicable State
RVP standard of either 9.0 psi, 7.8 psi,
or 7.0 psi.34 Additionally,
approximately 30 percent of the
30 Because the gasoline distribution system has
been configured to utilize 10 percent ethanol and
optimized to utilize the octane value of ethanol, we
expect ethanol will be blended at least at the same
levels it is blended today. Thus, we anticipate that
E10 will continue to be the dominant form of
gasoline supplied to the region, but will now be
blended into a lower-volatility blendstock produced
by refineries.
31 40 CFR 1090.215(a)(2) and (b)(1).
32 Of particular note for this action, seven
counties in southeast Michigan that border Ohio
have an RVP standard of 7.0 psi in the summer,
with a 1-psi waiver for E10.
33 See https://www.epa.gov/gasoline-standards/
state-fuels.
34 40 CFR 1090.215(b)(3). See also https://
www.epa.gov/gasoline-standards/state-fuels.
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gasoline sold in the U.S. is RFG, which
must meet a 7.4 psi RVP standard.35 The
1-psi waiver does not apply to RFG, and
thus E10 that is sold in RFG areas must
meet the 7.4 psi RVP standard. This
action removes the 1-psi waiver only for
conventional gasoline that is sold in the
petitioning States and does not apply to
gasoline sold in RFG or SIP program
areas. However, due to the
interconnected nature of gasoline
distribution, and the changes required
for a new fuel type, impacts on gasoline
quality and supply are expected to
extend beyond the petitioning States, as
further described below.
Before discussing the various steps
required to produce and distribute the
new lower-volatility gasoline,36 it is
useful to describe the gasoline fuel
supply system that is interdependent on
its different parts to bring a fuel to
market. The first step is fuel production,
in which refineries refine crude oil
using various processing units and then
blend the various blendstocks together
in finished gasoline tanks. The next step
is fuel distribution, in which the
gasoline in these tanks is transported
through the fuel distribution system to
the final market, mostly by pipelines.37
These pipelines transport a wide variety
of fuels and other products (e.g.,
gasoline, diesel fuel, jet fuel, heating oil,
petroleum blendstocks, etc.), including
an array of different grades and types of
gasoline (e.g., conventional gasoline,
RFG, boutique fuels, and regular and
premium grades of each). Each grade
and type of gasoline must be segregated
from other grades and types to preserve
the physical properties of each product.
When a pipeline reaches a juncture
where it branches out to two different
pipelines serving different gasoline
markets, a set of short-term storage tanks
(‘‘breakout tanks’’) are necessary to
offload the fuel from the upstream
pipeline to enable scheduling the
various fuels through the two
downstream pipelines. Pipeline systems
often have many branches from
upstream to downstream pipelines to
enable moving the fuel to the
downstream markets, and breakout
tanks serve an important function in the
fuel distribution system. For example,
35 40 CFR 1090.215(a)(3). The Chicago and St.
Louis areas are such RFG areas.
36 We refer to this new lower-volatility gasoline
as ‘‘low-RVP gasoline’’ throughout this preamble.
37 If all gasoline in the country was required to
shift to low-RVP gasoline, the impacts would be
limited to just refineries. The rest of the fuel
distribution system would merely distribute the
replacement low-RVP gasoline instead. However,
since this action only applies to the eight
petitioning states, a new additional type of gasoline
is required for the distribution system to also
handle.
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there are approximately 110 breakout
tank locations within the petitioning
States alone. Pipeline transportation of
gasoline to market also involves
downstream product terminals and bulk
plants, which accumulate gasoline from
pipelines and other bulk distribution
systems and distribute the gasoline to
retail outlets via tank trucks loaded at
terminal racks. Each rack can load a
premium grade and regular grade
gasoline, but some racks can load
additional grades and types of gasoline.
To minimize other impacts and
enable production and distribution of
low-RVP gasoline, refiners and fuel
distributors will need time to make
capital investments to optimize the fuel
production and distribution system to
replace the gasoline solely in the
petitioning States with low-RVP
gasoline. Without capital investments,
which can take two years or more to
complete, the limited availability of
additional storage tanks for the new
low-RVP gasoline grades—particularly
at pipeline breakout tank locations, but
also at refineries and downstream
terminals—may result in low-RVP
gasoline being sold within both the
petitioning States and the immediately
adjacent non-petitioning States. This
would increase the volume of low-RVP
gasoline needed to be produced and
distributed to satisfy demand. Over
time, we expect refiners and fuel
distributors to invest in and optimize
the fuel production and distribution
system to more efficiently target lowRVP gasoline solely to the petitioning
States.
A. Production
Refiners will need to make
modifications to their refinery
operations to supply low-RVP gasoline.
There are 11 petroleum refineries
located within the petitioning States;
that number increases to 40 when
refineries located in States that border
the petitioning States are included.
Further, additional refineries outside of
the immediate region may also modify
their operations to provide low-RVP
gasoline, as some of the gasoline supply
for the petitioning States also
historically comes from refineries
located further west, east, and south,
such as refineries in the Gulf Coast.38
For example, gasoline sold in Iowa is
38 According to the Energy Information
Administration (EIA), 64 million barrels of gasoline
were shipped from Petroleum Administration for
Defense District (PADD) 3 (Gulf Coast) into PADD
2 (Midwest), which corresponds to about 8 percent
of the volume of gasoline consumed in PADD 2.
EIA, ‘‘Petroleum & Other Liquids; Movements by
Pipeline, Tanker, Barge and Rail between PAD
Districts; PADD 3 to PADD 2,’’ https://www.eia.gov/
dnav/pet/pet_move_ptb_dc_R20-R30_mbbl_m.htm.
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14765
often produced by refineries located in
Texas and distributed via pipeline.
Therefore, this action could result in
changes in refinery operations both
within and outside of the petitioning
States and extend to refineries in the
Gulf Coast. Prior to the implementation
of this rule, most refineries producing
gasoline for use in the petitioning States
produce a CBOB with an RVP of 9.0 psi
during the summer season, with the 1psi waiver allowing the final gasolineethanol blend to meet an RVP standard
of 10.0 psi when 10 percent ethanol is
added to the CBOB downstream. With
the removal of the 1-psi waiver and to
enable the final gasoline-ethanol blend
to comply with the resulting 9.0 psi RVP
standard, refineries that choose to
continue producing CBOB for use
within the petitioning States will need
to make changes to their operations to
reduce the volatility of the CBOB
distributed to these States to ∼8.0 psi.39
For most refineries operating within and
near the petitioning States, removal of
the 1-psi waiver will likely result in the
refinery choosing to only produce lowRVP CBOB. Refineries operating outside
the petitioning States will choose to
either produce only low-RVP CBOB for
distribution to the petitioning and
adjacent States, continue to produce
only the current ∼9.0 psi RVP CBOB for
distribution to areas outside the
petitioning States, or both. The limited
availability of existing blending/storage
tanks at a refinery to handle both
gasoline types may prevent the refinery
from producing both blendstocks
without further capital investment.40
One commenter submitted a survey
with data from refiners in and around
petitioning States, which provided
information regarding what refiners may
have to do to meet the 9.0 psi RVP
standard and is further discussed
below.41 Nevertheless, at this time, we
cannot predict which of the refineries
that currently produce fuel for use in
the petitioning States will choose to
produce low-RVP CBOB for use in the
petitioning States and potentially the
39 We refer to this new lower-volatility CBOB as
‘‘low-RVP CBOB’’ throughout this preamble.
40 Certain areas within the petitioning states and
other states already have more stringent RVP
standards during the summer. Gasoline that
refineries produce for these areas would be
unaffected by this final rule. Refineries that produce
6.8 psi RVP CBOB for 7.8 psi RVP areas, or 6.4 psi
RVP RBOB for RFG areas, could expand production
of these gasoline types for use in the petitioning
states rather than create a new gasoline type at 8.0
psi RVP. This may reduce distribution cost
complexity, but in exchange increase refinery
production cost and lower gasoline production
volume.
41 Comment submitted by the American Fuel and
Petrochemical Manufacturers (AFPM), Docket Item
No. EPA–HQ–OAR–2022–0513–0077.
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surrounding States. Unlike a nationwide
change to the RVP of CBOB, the regional
nature of this action means that not all
refineries must adjust their refining
processes to reduce the RVP of their
CBOB. While it is highly likely that
refineries that supply gasoline only to
the petitioning States will adjust their
refinery processes to reduce the RVP of
their CBOB, these refineries could
choose to avoid the necessary
investments and provide 9.0 psi RVP
CBOB to non-petitioning States instead
if they are able to reach those markets.
Throughout the year, refineries must
adjust the volatility of their gasoline—
typically lowering the volatility of the
gasoline in the summer and increasing
the volatility in the winter by adjusting
the quantity of light hydrocarbons in
their gasoline. Refineries typically
control gasoline volatility by adjusting
the amount of butane in gasoline, but
sometimes they need to also modify the
amount of pentane or natural gas liquids
(NGLs). Refineries providing fuel to the
petitioning States will have to modify
their summer gasoline production
operations and potentially add capital
equipment to accommodate the 9.0 psi
RVP standard. A refinery’s ability to
adapt to the 9.0 psi RVP standard and
the time that it takes to do so depends
on the refinery’s structure, operations,
and the mix of crude oil types that it
processes.42
In addition to contributing to
gasoline’s volatility, butane also
contributes to gasoline’s octane and
volume. Thus, when removing butane,
refineries must also make other changes
to replace the lost octane to keep the
gasoline consistent and in compliance
with EPA regulations and industry
specifications. Refineries could produce
more alkylate or reformate, which are
two high octane gasoline blendstocks, to
make up the lost octane. We estimate
that the amount of butane that would
have to be removed to produce a
gasoline 1-psi lower in RVP amounts to
about two volume percent of the volume
of gasoline. However, comments from
the refining industry described how at
least some refineries would need to not
only remove butane, but some lessvolatile hydrocarbons as well (e.g., light
straight run naphtha (LSR) or NGLs).
Since LSR and NGLs are less volatile
than butane, refineries would need to
remove significantly more of those
hydrocarbons to realize the same 1-psi
reduction in RVP, perhaps up to 10
volume percent. Such a change would
have a smaller reduction in octane,
42 Further
discussion of the changes we expect
from refineries associated with removal of the 1-psi
waiver is available in the TSD.
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however. Removing butane and these
other light hydrocarbons from the
summer gasoline sold in the petitioning
States would reduce the supply of
gasoline in those States.
Regardless of how a refinery is
modified to reduce the RVP of its
gasoline, it will result in additional
output of the removed butane or other
light hydrocarbons. If excess onsite
butane storage capacity is available, the
refinery has the option of saving excess
butane on-site for use in winter gasoline
production, which would minimize the
cost impact of producing low-RVP
CBOB. However, if excess butane
storage is not available, the refinery
would then need to store it offsite (e.g.,
in caverns), sell it, or export it. This may
require additional butane railcars and
refinery upgrades for handling railcars
to transport the butane. Refineries may
also utilize some portion of the butane
as a feedstock to their alkylation unit. In
the near term, the large influx of excess
butane may exceed the existing storage
capacity, transport capacity, amount
desired in the markets, or alkylation
unit capacity. Without an outlet for the
excess butane, this could then limit the
refinery’s ability to produce low-RVP
CBOB, further reducing the supply of
low-RVP gasoline. If a refinery is
removing LSR or NGLs from its
gasoline, these gasoline blendstocks
could be sold to another refinery that
could blend them into its gasoline, but
the purchasing refinery would then
need to remove butane to compensate
for the RVP impact of the LSR or NGLs.
This gasoline blendstock switching
would help to offset the volume
reductions associated with producing
low-RVP CBOB.
Given the high demand for gasoline in
the summer months, refineries often
begin producing summer gasoline for
storage well ahead of the upcoming high
ozone season. This process can begin as
early as December of the year prior to
the applicable high ozone season, and
thus storage of a differing volatility of
fuel could impact the refinery’s ability
to utilize the fuel the next summer
without further modification.
B. Distribution
As discussed above, removal of the 1psi waiver will require refineries that
distribute gasoline to the petitioning
States to produce low-RVP CBOB. There
are three primary groups within the
distribution chain that will be impacted:
refineries, pipelines (with their breakout
terminals), and downstream product
terminals.
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1. Refinery Distribution
Most refineries have an onsite
terminal with numerous product storage
tanks wherein they accumulate and
store the range of products that they
produce prior to placing the products
into the distribution system. Once a
refinery accumulates a sufficient
volume of a gasoline type and confirms
that it meets the applicable gasoline
specifications, the refinery then
schedules the shipment of that batch of
gasoline to downstream markets.
Shipment can occur via an onsite
product terminal analogous to that
discussed in Section V.B.3 where trucks
load product and deliver to retail
outlets. However, most gasoline
produced by refineries is loaded onto
product pipelines for delivery to
downstream product terminals. In some
cases, refineries also distribute product
by rail or barge. For those refineries that
distribute most or all of their gasoline to
the petitioning States, removal of the 1psi waiver will have little impact on
their distribution operations. They can
switch over their existing product tanks
to hold only low-RVP CBOB. Instead of
transitioning from winter CBOB RVP
levels (up to 15 psi) to a 9.0 psi RVP
CBOB in the summer, they would
instead transition to low-RVP CBOB.
However, refineries that produce
gasoline for both petitioning and nonpetitioning States will likely need
additional tanks, pipes, manifolds, and
control systems to store the additional
grades of gasoline. The time needed to
plan, design, permit, and construct
additional tankage is typically on the
order of two or more years. Until this
can be accomplished, a refinery that
lacks the additional tankage will likely
need to shift all its production to lowRVP CBOB. However, this can be
avoided if unused systems already exist
or other products are discontinued.43
The market may go through a ‘‘sorting
out’’ process, wherein some refineries
shift their historic markets, with some
changing to producing only low-RVP
CBOB and others continuing to produce
only 9.0 psi RVP CBOB. This could
result in some low-RVP CBOB flowing
in from outside the petitioning States
(e.g., from Gulf Coast refineries). Due to
tankage and logistical limitations, some
refineries serving both markets may
initially shift all their production to
low-RVP CBOB. This would result in
low-RVP CBOB being distributed to the
surrounding States, which would ease
gasoline supply availability concerns,
43 Alternatively, some refineries may shift all
premium grade fuel to low-RVP CBOB, while
producing both 9.0 psi and low-RVP CBOBs for
regular grade fuel.
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but at the same time add to the overall
reduction of gasoline supply due to
butane and other light hydrocarbon
removal. Terminals servicing low-RVP
CBOB outside the petitioning States that
have butane blending facilities could
purchase some of the excess butane
being removed by refineries and inject
it into their CBOB to bring the fuel up
to 9.0 psi RVP since the gasoline in their
area would not require the low-RVP
fuel.
For those refineries that have excess
tankage or invest in new tankage to
allow the production of both 9.0 psi and
low-RVP CBOB, they would also need to
adjust their operations and schedules
for loading gasoline blendstock onto
pipelines, barges, or rail to split their
production into separate product
streams. These logistical changes would
initially take some period of time in
order to occur smoothly and safely, but
should streamline over time.
2. Pipelines and Pipeline Breakout
Terminals
Most fuel in the U.S. flows from
refineries to consumer markets via
pipeline systems. As described in the
TSD, there are several pipeline systems
serving the petitioning States, the vast
majority of which serve both petitioning
and non-petitioning States.
Consequently, the addition of the lowRVP CBOB in the petitioning States will
require significant changes in the
operations of the pipeline systems.
What is currently one large
conventional fuel market distributing
primarily 9.0 psi RVP CBOB will also
need to distribute the new low-RVP
CBOB. There will thus be a period
where the pipeline systems go through
a planning and optimization process to
assess what gasoline type must be
supplied to the pipeline to comply with
the new fuel requirement. If a pipeline
primarily serving the petitioning States
is only equipped with breakout tanks
compatible with a single gasoline type,
the pipeline company will likely
mandate that refiners solely provide that
gasoline type. Decisions from refineries
on whether they will supply low-RVP
CBOB, and at what volumes, will be
necessary to inform the planning and
optimization process by pipeline
systems. All of this can have impacts on
gasoline supply not only to the
petitioning States, but also to the
surrounding States in the short term.
Having the wrong fuel types in the
wrong volume can result in an inability
for the pipeline to move fuel in and out
of tankage as needed, which, in turn,
can result in significant supply
disruption not only for the gasoline type
in question, but also for all the fuels
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shipped on the pipeline. For the longer
term, due to the market splitting into
different types, some areas in the
petitioning States may lose access to
available markets of supply, which may
then lead to more frequent shortfalls in
supply during times of disruption (e.g.,
refinery fire, pipeline outage, hurricane,
etc.).
Some pipeline companies operate a
fungible distribution system. This
allows them to collect a standard type
of gasoline from refineries into their
system, ‘‘transport’’ the barrels virtually,
and draw out identical barrels at their
destination. The barrels delivered are
not actually the purchased barrels from
the refinery, but rather the same product
from a different refinery meeting the
same product specifications. An
additional type of gasoline would
disrupt their ability to function as
efficiently using the fungible system.
This increases the complexity
associated with ensuring products can
be distributed to locations in the
timeframe needed to ensure supply to
the market.
The most significant impact on
pipeline operations caused by the
removal of the 1-psi waiver, however,
will be on pipeline breakout tankage
operations. Breakout tankage is required
at junctions where pipelines connect
with other pipelines that have differing
schedules and flow rates. Thus, the
pipelines typically need tankage to store
every grade and type of product
distributed on the pipeline, with the
size and configuration of the tankage
matched to the product and pipeline
batch sizes. If new regular and premium
grades of low-RVP CBOB need to be
shipped on the pipeline, then it may
require the addition of new tankage at
these breakout tank facilities. The
planning, permitting, and construction
of such additional tankage would
require two or more years and is likely
to be an issue at many breakout tankage
facilities both inside and outside the
petitioning States. Until this additional
breakout tankage can be brought into
service, an impacted pipeline serving
the petitioning States may be restricted
to solely distributing either 9.0 psi or
low-RVP CBOB, limiting gasoline
supply to either the petitioning States or
the surrounding States, and in turn
restricting what the refineries shipping
on the pipeline are able to produce if
the pipeline restrictions do not allow for
the distribution of a particular type of
gasoline. Some pipelines may opt to
carry one fuel type and some the other,
limiting the product offerings at the
various downstream product terminals.
As with the refineries, it may be that
due to tankage and logistical limitations,
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pipelines currently serving both
petitioning and non-petitioning States
will have to initially shift all the
gasoline they carry to low-RVP CBOB,
which is fungible in both markets. This
will result in low-RVP CBOB being
supplied in the surrounding States and
additional reduction in supply of
gasoline due to the necessary removal of
butane and other light hydrocarbons.
Pipelines would have the option to
blend in butane during gasoline
transport to the States with the 1-psi
waiver that are located at the end of the
pipeline systems (e.g., North Dakota and
Michigan). This would provide a market
for some of the excess butane from
refineries producing low-RVP CBOB
and could reduce consumer costs in the
border States by blending up to 9.0 psi
RVP CBOB. It could also allow more
low-RVP CBOB to be produced if there
are constraints in the markets for
butane. However, like refineries, many
pipeline and terminal facilities do not
currently have the existing
infrastructure to utilize butane blending.
Additional tankage and equipment may
be needed to maximize the potential of
this opportunity.
3. Product Terminals
The potential impact of the removal of
the 1-psi waiver on product terminals
varies depending on whether the
terminals provide gasoline only to the
petitioning States, or to non-petitioning
States as well. Those terminals that only
provide gasoline to the petitioning
States will be little impacted, as they
will simply take delivery of replacement
grades of low-RVP CBOB beginning in
the spring leading into the summer
season. They will not have to contend
with adding additional fuel grades and
types and the tankage and logistics
associated with them. This will most
likely not be the case for terminals that
serve areas both within and outside the
petitioning States. If such terminals do
not have sufficient onsite tankage
capacity to handle the additional regular
and premium grades of low-RVP CBOB,
then they will need to either add the
tankage or choose to serve one market
or the other. The decision to serve a
particular market or fuel type may also
be dictated by a fuel marketer on the
retail side. Both options could have
gasoline supply, cost, and price impacts
both within the petitioning States and in
the surrounding areas the terminals
serve. Approximately 75 such terminals
are located close to the borders (i.e., 30
miles) between petitioning States and
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non-petitioning States.44 These
terminals are more likely to provide
gasoline to both petitioning and nonpetitioning States and will need to
change their gasoline distribution
patterns if they lack extra tankage to
handle the additional low-RVP CBOB
grades. Since terminals can serve
gasoline markets up to 200 miles away,
the number of terminals impacted could
be significantly greater. If limitations in
the fuel distribution system cause lowRVP CBOB to be sold in a significant
portion of the surrounding States to
improve fungibility of gasoline near the
petitioning States, the potential impact
on terminals will be reduced.
Regardless of whether a terminal
serves only the petitioning States, or
also non-petitioning States, all terminals
will be impacted to some degree by a
somewhat more challenging transition
in the spring from winter to summer
fuel due to the removal of the 1-psi
waiver, particularly in the first year.
While this transition occurs every year
as the terminals blend down the
volatility of the CBOB they have in
storage from the higher RVP of winter
CBOB to the lower RVP of summer
CBOB, the change of having to blend
down an additional 1.0 psi to
accommodate low-RVP CBOB instead of
9.0 psi RVP CBOB will require some
additional time and incur additional
cost. In order to achieve the volatility of
low-RVP CBOB, pipelines and terminals
will likely need to blend down their
winter CBOB with a summer CBOB that
has an RVP as low as 6.0 psi during this
transition period. Additionally,
terminals will likely take steps to ensure
their tanks are drained as low as
possible prior to receiving a low-RVP
CBOB to ensure the finished gasoline
will comply with the 9.0 psi RVP
standard, which could result in
additional delays before the low-RVP
CBOB begins moving to markets. This
will likely occur more frequently at
terminals located within and near the
border of the petitioning States.
4. Tank Trucks
Moving gasoline to market also
involves tank trucks that deliver the
gasoline to retail outlets. For terminals
located within the petitioning States,
their operations should be little
impacted by the removal of the 1-psi
waiver; they will simply pick up a
different type of gasoline from the
product terminal than they did before
and can transport it to market, even
outside the petitioning States if the
terminal normally covers the area.
44 EIA, U.S. Energy Atlas—Oil and Natural Gas
Maps, https://www.eia.gov/maps.
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However, depending on the changes in
product offering at the terminals, there
may still be considerable stress on their
operations. If some refineries, pipelines,
or terminals limit their product offering
to either 9.0 psi or low-RVP CBOB,
especially in the near term, then the
tank trucks would need to shift their
operations accordingly. In some cases
where there is a loss of fuel fungibility,
this is expected to increase the distances
traveled, which may in turn require the
purchase of additional tank trucks and
hiring of additional drivers. As with the
rest of the fuel distribution system, this
can all be accomplished, but will take
some time for the market to respond and
optimize around the new norms.
C. Retail Operations
The removal of the 1-psi waiver and
resulting transition from 10.0 psi RVP
gasoline to 9.0 psi RVP gasoline
received from the terminal should be
minor for retail outlets—they will
simply take delivery of the lowervolatility gasoline from the terminal.
The most noticeable effects will be seen
at retail outlets near the borders of
States maintaining the 1-psi waiver, as
the cost of 9.0 psi RVP gasoline within
the petitioning States is likely to be
higher than that of 10.0 psi RVP
gasoline across the border in nonpetitioning States. Retailers within the
petitioning States may have to charge
higher prices to recoup this cost, which
could result in consumers preferentially
choosing to refill at stations across the
border when possible.45 Retail
operations located near State lines on
the border of petitioning and nonpetitioning States may have issues
scheduling gasoline shipments to their
retail outlets if tank trucks are shipping
their gasoline from terminals located
further away and if there is an initial
shortage of tank truck operators,
particularly at the beginning of the
transition to the new 9.0 psi RVP
gasoline. As with the rest of the
distribution system, this can all be
accomplished, but will take some time
for the market to respond and optimize
around the new norms.
VI. Implementation and Effective Date
A. Statutory Provisions
Under CAA section 211(h)(5)(C), the
regulations removing the 1-psi waiver
shall take effect on the later of: (1) The
first day of the first high ozone season
for the area that begins after the date of
receipt of the notification; or (2) 1 year
after the date of receipt of the
notification. The high ozone season is
45 This phenomenon is observed today in SIP and
RFG areas.
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defined in EPA’s regulations as ‘‘June 1
through September 15 for retailers and
[wholesale purchaser consumers
(WPCs)], and May 1 through September
15 for all other persons,’’ which
includes gasoline distribution
terminals.46
In applying this provision for the
petition dated April 28, 2022, the later
date is April 28, 2023. Therefore, the
earliest date on which the removal of
the 1-psi waiver for Illinois, Iowa,
Nebraska, Minnesota, South Dakota, and
Wisconsin could have been effective
was April 28, 2023. This date would
have been in advance of the high ozone
season beginning May 1, 2023. For the
petition from Ohio, dated June 10, 2022,
the later date is June 10, 2023. This
would have placed the effective date
within the 2023 high ozone season (i.e.,
10 days after the beginning of the high
ozone season for retailers and WPCs,
and 41 days after the beginning of the
high ozone season for all other parties).
Finally, for the petition from Missouri,
dated December 21, 2022, the later date
is December 21, 2023.47 This would
have placed the effective date after the
2023 high ozone season.
Further, under CAA section
211(h)(5)(C), the effective date can be
extended if EPA, on its own motion or
on petition from any person, after
consultation with the Secretary of
Energy, determines there would be an
insufficient supply of gasoline in a State
that has requested the removal of the 1psi waiver for E10.48 Section
211(h)(5)(C) further provides that the
effective date can be extended for not
more than one year, and that EPA may
renew the extension for two additional
periods, each of which shall not exceed
one year.
As described above, EPA is allowed to
extend the effective date of the removal
of the 1-psi waiver upon a finding of
‘‘insufficient supply of gasoline in the
[petitioning] state’’ that would result
from ‘‘the promulgation of the
regulations [to remove the 1-psi
waiver].’’ 49 ‘‘Insufficient supply of
gasoline’’ is not defined in the statute,
and thus EPA is interpreting and
applying the phrase in a manner that is
consistent with the structure of the
statute, historical application of similar
46 40 CFR 1090.80. We note that given the current
definition of ‘‘high ozone season,’’ the later date
will always be one year after receipt of the request
from a Governor.
47 We recognize that the Missouri petition
requested that the removal take effect for the 2023
high ozone season. However, such an effective date
was not permissible under CAA section
211(h)(5)(C).
48 CAA section 211(h)(5)(C)(ii).
49 CAA section 211(h)(5)(C).
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or related provisions, and congressional
intent. We interpret ‘‘insufficient supply
of gasoline’’ to require a demonstration
that gasoline supply disruptions would
result from removal of the 1-psi waiver,
such that the necessary quantities of
gasoline may not be available in the
States at the time they are required. It
is particularly appropriate in this case to
consider the possibility of supply
disruptions because this action calls for
a different type of gasoline to be
physically produced and transported to
and within the petitioning States. CAA
section 211(h)(5) also indicates that our
analysis of ‘‘insufficient supply’’ should
be ‘‘in the State’’ petitioning for the
removal of the 1-psi waiver. That is, if
there was insufficient supply only in a
single State, we could extend the
effective date for that State only. This
contrasts with CAA section
211(c)(4)(C)(iii)(I), which calls for
consideration of supply constraints in
‘‘the smallest geographic area.’’
Therefore, our analysis properly
considers any state-specific factors, and
examines the supply in the State.
In considering the likelihood of
supply disruptions, we look to the
entire production and distribution
chain, from the refineries where
gasoline is produced, through
distribution systems such as pipelines
and trucking, and ultimately to the retail
outlets. This reading is also similar to
EPA’s interpretation of other provisions
in CAA section 211 that call for
consideration of constraints on fuel
supply when EPA is acting on petitions
within the fuels program. For instance,
CAA section 211(k)(6)(A)(ii) allows
EPA, after consultation with the
Department of Energy, to extend the
effective date for a State that has
petitioned to opt into the RFG program
for a period that is up to one year from
the date of receipt of the petition upon
a finding of insufficient domestic
capacity to produce RFG. A related
provision in CAA section
211(k)(6)(B)(iii) allows EPA to extend
the effective date for areas within the
ozone transport region established
under CAA section 184 that opt into
RFG, upon a finding of insufficient
capacity to supply RFG. Like the phrase
‘‘insufficient supply of gasoline’’ in
CAA section 211(h)(5)(C), the statute
does not define either ‘‘insufficient
domestic capacity’’ or ‘‘insufficient
capacity to supply RFG.’’ But in acting
on petitions to opt into the RFG
program, EPA has explained that setting
the effective date allows EPA to
consider any sudden and unexpected
increases in the demand for RFG on the
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local supply and distribution system
that is caused by an opt-in.50
EPA’s reading of ‘‘adequate supply’’
in CAA section 211(c)(4)(C)(ii) comports
with our interpretation of CAA section
211(h)(5)(C) given that Congress
intended for EPA to act in certain
unique emergency circumstances to
relieve supply disruptions within the
‘‘motor fuel distribution system.’’ 51 And
while ‘‘motor fuel distribution system’’
is not defined in the statute, EPA’s
historical practice in granting waivers
under CAA section 211(c)(4)(C)(ii) has
been to consider all stages of the
gasoline production and distribution
system within States that are
experiencing emergency circumstances.
In contrast, the phrase ‘‘insufficient
supply of gasoline’’ differs from other
sub-provisions of CAA section 211
allowing for waivers of applicable
requirements as well as implementation
delays that use language such as
‘‘inadequate domestic supply.’’ 52 The
D.C. Circuit has provided guidance on
the meaning of ‘‘inadequate domestic
supply’’ in CAA section 211(o)(7)(A)(ii),
finding that EPA may properly consider
‘‘supply side factors—such as
production and import capacity,’’ but
not downstream effects.53 The court, in
viewing the statutory scheme of the RFS
program, further specified that the
supply of renewable fuel to refiners,
blenders, and importers properly
considers the factors necessary to get
renewable fuel to refiners, blenders, and
importers, but not to market actors
‘‘downstream from refiners, importers,
and blenders.’’ We find that the analysis
under CAA section 211(h)(5) extends to
include market actors downstream from
refiners, importers, and blenders, as the
gasoline distribution system is a key
component to the availability of
gasoline in the State.54 The analysis
properly considers production factors,
as well as the distribution of fuel from
the refinery, through the distribution
chain (including pipelines and
terminals) to the ultimate endpoint of
50 62 FR 30261, 30263 (June 3, 1997) (‘‘Section
211(k)(6)(A) of the Act gives the Administrator
discretion to ‘establish an effective date * * * as he
deems appropriate* * *.’ EPA interprets this
provision to mean that it has broad discretion to
consider any factors reasonably relevant to the
timing of the effective date. This would include
factors that affect industry and the potential opt-in
area. The factors that affect industry could include
productive capacity and capability, other markets
for RFG, oxygenate supply, cost, lead time, supply
logistics for the area, potential price spikes, and
potential disruption to business.’’)
51 CAA section 211(c)(4)(C)(iii)(V).
52 CAA sections 211(m)(3)(C) and (o)(7)(A)(ii).
53 Americans for Clean Energy v. EPA, 864 F.3d
691, 710 (2017).
54 CAA section 211(h)(5)(C) explicitly
contemplates the ‘‘supply of gasoline in the State.’’
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14769
the gasoline distribution chain—the
retail outlet. Further, CAA section
211(h)(5) explicitly contemplates the
‘‘supply of gasoline in the State.’’
Finally, we note that consideration of
the effective date for this action
properly considers supply to the
ultimate consumer given the statutory
language ‘‘in the State.’’ Therefore, our
analysis of ‘‘insufficient supply of
gasoline’’ properly considers all stages
of the gasoline production and
distribution system, from the refinery to
the retail outlet.
B. Finding of Insufficient Supply for
2024 and Renewal of Extension of
Effective Date
CAA section 211(h)(5)(C)(ii)(I)
requires a determination of insufficient
supply of gasoline in order to extend the
effective date of the removal of the 1-psi
waiver. We determined that a 2023
implementation date would result in
insufficient supply of gasoline and
proposed an effective date of April 28,
2024, for removal of the 1-psi waiver in
all petitioning States.55 We also sought
comment on renewing the extension of
the effective date for removal of the 1psi waiver for an additional year (i.e.,
until the summer of 2025).56 We
received comments for and against the
proposed effective date. Commenters
against the proposed dates argued that
we could still implement the rule for the
2023 summer season, despite the mere
two weeks between the end of the
comment period and the beginning of
the 2023 summer season for terminals
and refiners. Commenters in support of
the proposed delay argued that a 2023
effective date would be either
‘‘impractical’’ or ‘‘impossible.’’
Further, in response to and after the
proposal, we received petitions from
numerous stakeholders requesting a
delay of the proposed effective date
until either 2025 or 2026. These
stakeholders posited that the extension
of the effective date would be supported
by the Administrator’s finding of
insufficient supply of gasoline pursuant
to CAA section 211(h)(5)(C)(ii)(I).57
55 At proposal, we further explained that the
effective date for Ohio, would have been within the
2023 high ozone season (i.e., 10 days after the
beginning of the high ozone season for retailers and
WPCs, and 41 days after the beginning of the high
ozone season for all other parties), while the
effective date for Missouri would have been
December 21, 2023, or after the 2023 high ozone
season. 88 FR 13762 (March 6, 2023).
56 88 FR 13767 (March 6, 2023).
57 Petition from Magellan (September 16, 2022);
Petition from API (September 23, 2022); Petition
from Flint Hills Resources (September 29, 2022);
Petition from Phillips 66 (September 29, 2022);
Petition from AFPM and other parties (October 14,
2022); Petition from HF Sinclair (October 17, 2022);
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After consideration of comments and
extension petitions, EPA is acting on its
own motion to renew the extension of
the proposed effective date for an
additional year from April 28, 2024, to
April 28, 2025. In sum, the
circumstances that justified a finding of
insufficient supply of gasoline and
extension of the effective date for 2023
have not attenuated. Additionally, we
have consulted with the Department of
Energy, consistent with the CAA section
211(h)(5)(C)(ii)(I). We are not acting on
petitions that requested a 2026 effective
date, and these petitions remain
pending. In this section we discuss our
finding that there would be an
insufficient supply of gasoline in 2024.
At proposal, we provided the
rationale for our determination of
insufficient supply for 2023; we
assessed the following three supply
constraints: (1) Low gasoline
inventories; (2) The limited time
available for coordination between
various parties to make the necessary
physical changes to the gasoline
production and distribution
infrastructure; and (3) The physical loss
of supply necessary to produce low-RVP
CBOB. We determined that these
constraints would likely have led to
supply disruptions in the petitioning
States in 2023.58
We have now assessed gasoline
supply impacts associated with an
effective date in 2024 and updated our
analyses of these supply constraints.59
As discussed further in detail below and
in the TSD, our updated analyses found:
(1) Continued low gasoline inventories
in PADD 2; (2) The limited time
available after the promulgation of this
action for coordination between various
parties to make the necessary physical
changes to the gasoline production and
distribution infrastructure; and (3)
Petition from Magellan (August 19, 2023); Petition
from Kevin Stitt, Governor of Oklahoma (August 25,
2023); Petition from API (September 29, 2023);
Petition from AFPM (September 29, 2023); Petition
from Sarah Huckabee Sanders, Governor of
Arkansas (October 9, 2023); Petition from Superior
Refining (October 13, 2023); Petition from Phillips
66 (October 18, 2023); Petition from CountryMark
(October 25, 2023); Petition from Yesway
(November 1, 2023); Petition from HF Sinclair
(November 15, 2023).
58 Our detailed finding of insufficient supply for
2023 can be found at 88 FR 13767 (March 6, 2023).
59 EPA also received several petitions for further
delay beyond 2024. See Petition from Magellan
(August 25, 2023); Petition from Kevin Stitt,
Governor of Oklahoma (August 25, 2023); Petition
from API (September 29, 2023); Petition from AFPM
(September 29, 2023); Petition from Sarah Huckabee
Sanders, Governor of Arkansas (October 9, 2023);
Petition from Superior Refining (October 13, 2023);
Petition from Phillips 66 (October 18, 2023);
Petition from CountryMark (October 25, 2023);
Petition from Yesway (November 1, 2023); Petition
from HF Sinclair (November 15, 2023).
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Greater reduction in supply as a result
of the removal of the 1-psi waiver than
estimated at the time of the proposal.
We also considered the following: (1)
The lack of sufficient time to make the
capital investments and physical
changes to refineries and the fuel
distribution system; and (2) Less
flexibility within the fuel distribution
system than had been anticipated to
adequately mitigate the supply
reduction until such time as the capital
and physical changes can be made. We
are therefore renewing the extension of
the delay of the effective date for an
additional year to April 28, 2025.
Since proposal, we have conducted an
updated analysis to quantify the
reduction in gasoline supply that would
result from the removal of the 1-psi
waiver. At proposal, we estimated the
reduction in supply as 20 thousand
barrels per day (kbpd) based on the
removal of light hydrocarbons—mostly
butane—to reduce the volatility of
CBOB.60 In response to our proposal,
AFPM commissioned a study of supply
reductions that quantified the reduction
in gasoline supply at 88–120 kbpd.61 We
also conducted a series of meetings with
refiners regarding the supply impacts
associated with the removal of the 1-psi
waiver in the petitioning States.62 As
further described in the TSD, based on
our discussions with refiners and our
review of the comments, we now
estimate that gasoline production by
refineries supplying gasoline to the
petitioning States would likely decrease
by 30–80 kbpd as a result of the
transition to low-RVP CBOB. Our
estimate increased from the proposal
primarily because a significant number
of refineries that choose to produce lowRVP CBOB will need to reduce other
less-volatile hydrocarbons (e.g., NGLs),
which will have a larger impact on
gasoline supply. On average, refineries
producing low-RVP CBOB are estimated
to produce 3–4 percent less gasoline
compared to producing 9.0 psi RVP
CBOB, particularly when removal of the
1-psi waiver is first implemented. We
acknowledge that the possibility of
drawing down gasoline inventories,
increasing gasoline supply from other
regions (e.g., Gulf Coast), and reblending
some higher-volatility gasoline
60 ‘‘Technical Support Document for the Proposed
Removal of the 1-psi Waiver,’’ available in the
docket for this action.
61 Baker and O’Brien, ‘‘Midwest States Gasoline
RVP—1 psi Waiver Study, Report for American
Fuel and Petrochemical Manufacturers,’’ February
24, 2023. Submitted as part of comments from
AFPM, Docket Item No. EPA–HQ–OAR–2022–
0513–0077.
62 Memorandum to the Docket: Meeting Log for
Requests from States to Remove the Gasoline
Volatility Waiver.
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blendstocks at terminals in nonpetitioning States could mitigate the
supply reduction to some extent.
However, we believe that these
mitigating actions would fall far short of
offsetting the projected supply
reductions for the 2024 summer season.
Further, at proposal we noted that
while the gasoline inventories in PADD
2 (the affected region) was low, we
believed that it would likely return
closer to historic levels due to the
previously shut-down Midwest
refineries returning to operation.
However, even though these refineries
have since come back online—
increasing gasoline production in the
region—the gasoline inventories in
PADD 2 63 have continued to be at levels
of concern.64 Furthermore, we have
been made aware of the fact that refiners
have had a heavy maintenance season at
their refineries in the fall of 2023 and
are planning a heavy maintenance
season for the first quarter of 2024. This
means that gasoline production capacity
will be taken offline for several months
at a key time during the winter season
when gasoline inventories are typically
replenished prior to the next summer
season.65 Additionally, gasoline
demand is still expected to increase.
EIA estimates that national gasoline
demand will increase by 60 kbpd in
2024 compared to 2023, further
straining gasoline inventories and
supply.66 Thus, we anticipate that
gasoline inventories in PADD 2 will not
recover sufficiently by the 2024 summer
season to alleviate the estimated loss of
gasoline supply that would occur when
low-RVP CBOB is produced. Further,
due to a separate and unrelated
regulatory action, the prohibition on
sale of conventional gasoline in the
Denver metropolitan area began on
November 7, 2023. This means that
63 Low gasoline inventories in PADD 2 were an
additional bases for the emergency fuel waivers
issued under CAA section 211(c)(4)(C)(ii)(I) during
the summer of 2023. See Letter from EPA
Administrator to Governors, ‘‘May 1, 2023, E15
Reid Vapor Pressure Fuel Waiver,’’ April 28, 2023
(‘‘The Midwest region—the region that has the most
ability to increase supply with blending an
increased percentage of ethanol—has gasoline
stocks below the five-year seasonal average for this
time of year.’’).
64 Based on our discussions with EIA, gasoline
supply begins to be a concern when gasoline
inventories drop below the 5-year minimum for any
particular PADD.
65 Bloomberg News, ‘‘Nearly 2.5 Million Barrels a
Day of US Refining Capacity to Shut for Fall
Maintenance,’’ October 2, 2023, https://www.bnn
bloomberg.ca/nearly-2-5-million-barrels-a-day-ofus-refining-capacity-to-shut-for-fall-maintenance1.1979186.
66 EIA, Annual Energy Outlook (AEO) 2023, Table
11, https://www.eia.gov/outlooks/aeo. AEO 2023
also estimates that gasoline demand will decrease
by 140 kbpd in 2025 relative to 2024.
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gasoline sold in that area must comply
with a 7.4 psi RVP requirement
beginning with the 2024 summer
season.67 This is expected to cause an
additional 5–10 kbpd reduction in
gasoline supply in the same 2024
summer season. Although Denver is not
in a petitioning State, some gasoline is
currently supplied to this region from
refineries that also produce gasoline for
the petitioning States, resulting in
additional strain on gasoline supply in
the region.
As also described in Section V and
the TSD, capital investments will be
necessary for some refiners and fuel
distributors to accommodate a transition
to low-RVP CBOB in the petitioning
States. This includes investments for the
storage of additional gasoline types and
grades, storage of excess butane and
LSR, and associated measures for
piping, pumping, and spill containment.
We also anticipate that refineries would
need to debottleneck debutanizers and
octane-producing units to enable the
production of low-RVP CBOB.68 These
capital investments typically require
time to come online. For example,
projects to debottleneck existing
refinery units typically require 2–2.5
years to engineer, design, purchase,
permit and install. Under an assumption
that refiners and fuel distributors could
have begun the planning process for
debottlenecking a refinery unit or
installing a gasoline storage tank after
the first State filed its petition in April
2022, or after EPA proposed to remove
the 1-psi waiver in the petitioning States
in early 2023, there would be
insufficient time prior to the summer of
2024 to complete the desired capital
additions. However, based on
discussions with refiners, pipeline
operators, and terminal operators, as
well as public comments, many of the
needed capital investments were not
initiated in 2022 due in part to: (1) The
uncertainty created by several States
rescinding their petitions during 2022;
(2) The emergency fuel waivers under
CAA section 211(c)(4)(C)(ii)(I) extending
the 1-psi RVP waiver to E15 during the
67 87
FR 60926, 60932–33 (October 7, 2022).
grassroots projects typically require 3–
4 years to engineer, design, purchase, permit and
install. Smaller projects that can ‘‘debottleneck’’
individual refinery units (e.g., replacing a furnace,
heat exchanger, or reactor) typically require 2–2.5
years to complete, while much smaller projects
(e.g., replacing a valve or pump or adding or
increasing the size of piping) may be designed and
completed in a year or less. These types of capital
investments can help a refinery produce additional
low-RVP CBOB. Shell, ‘‘Thriving in the new reality:
Refinery revamp projects FAQ; Shell Catalysts and
Technologies,’’ https://www.shell.com/businesscustomers/catalysts-technologies/resources-library/
refinery-revamp-faq.html.
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68 Capital
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2023 summer season; 69 and (3)
Potential congressional action that
would extend the 1-psi waiver to E15
nationwide.70 Without initiation in
2022, many of the necessary capital
investments are unlikely to be
completed by the summer of 2024.
In addition, supplying the new lowRVP CBOB will require coordinated
investments, planning, and actions
between refineries, pipelines and other
fuel distribution companies, terminals,
and retail outlets. Typically, this
coordination occurs before winter to
provide the fuel production and
distribution system a chance to make
the proper preparations; we are now
past the point in the calendar when
such coordination typically occurs. We
are also entering into the timeframe
when most refineries have already
started producing summer gasoline. As
such, refineries will not have sufficient
and appropriate notice to begin
modifying their fuel supply for the
summer of 2024.
Finally, we assumed at proposal that
flexibility within the fuel production
and distribution system could allow
refiners and fuel distributors to mitigate
the projected 2024 summer season
supply reduction until such time as
capital and physical changes could be
completed. However, based on
subsequent comment and analysis, we
now believe that the existing flexibility
would not be sufficient, particularly in
light of the larger anticipated supply
reduction and lingering low gasoline
inventories in PADD 2.
For the above-mentioned reasons,
supported by additional detail and
analysis in the TSD, we are making a
determination that there will be an
insufficient supply of gasoline in the
petitioning States in the 2024 summer
season and, therefore, are renewing the
extension of the effective date of the
removal of the 1-psi waiver by an
additional year to April 28, 2025.71
VII. Cost and Price Impacts
There are associated costs with the
changes to the refining and gasoline
distribution systems described in
Sections V and VI. Part of the costs will
be incurred by the refining sector, while
another portion will be incurred by the
gasoline distribution system. Gasoline
69 From April 28, 2023, to August 28, 2023, EPA
issued a waiver under CAA section
211(c)(4)(C)(ii)(I) that facilitated E15 sales during
the summer of 2023.
70 See, e.g., comments from Magellan (Docket
Item No. EPA–HQ–OAR–2022–0513–0042), API
(Docket Item No. EPA–HQ–OAR–2022–0513–0056),
and HF Sinclair (Docket Item No. EPA–HQ–OAR–
2022–0513–0076).
71 Discussion of the supply circumstances in the
summer of 2025 is available in TSD Section 7.
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refining costs will increase due to
several factors, the largest portion of
which is the lost opportunity cost for
refiners having to sell the removed light
hydrocarbon material at lower market
prices instead of blending this material
into high value summer gasoline. To the
extent that refiners and distributers
install capital equipment, there are also
additional capital and associated
operating costs that will need to be
recouped over time. These costs will be
passed along to consumers in the
petitioning and surrounding States in
the form of higher gasoline prices.
With respect to consumer fuel prices,
while fuel prices generally reflect fuel
costs in the competitive gasoline
market, this may not be the case when
removal of the 1-psi waiver is first
implemented, as gasoline supply will be
reduced and not yet recovered. Due to
the reduced supply, there will likely be
a reduction in PADD 2 gasoline
inventories, which could further
increase gasoline prices. Due to the
challenges that some refiners may have
in producing low-RVP CBOB and the
associated impacts on gasoline
inventories, fuel prices will likely
exceed fuel costs because the marginal
cost producer will set the fuel price.
This will likely affect gasoline prices in
both petitioning and non-petitioning
States and result in higher gasoline
prices at the pump for consumers. The
potential cost and price impacts due to
the removal of the 1-psi waiver are
discussed in more detail in the TSD.
As discussed above, under the
relevant CAA provisions, upon
receiving a petition from a State
Governor that is accompanied by a
successful demonstration of emissions
increases as a result of the 1-psi waiver,
EPA is required to remove the 1-psi
waiver in the areas requested by the
Governor. In deciding whether to grant
the petition, the statute does not provide
EPA with the authority to consider fuel
cost or price impacts and we assume
that any fuel cost or price impacts to
consumers were taken into
consideration by the Governors of the
petitioning States in submitting their
petitions. Therefore, regardless of the
magnitude of the impact of this action
on fuel costs or prices, EPA has not
considered them in this action.
VIII. Associated Regulatory Provisions
In the NPRM, we proposed changes to
the fuel quality regulations at 40 CFR
part 1090 to implement the removal of
the 1-psi waiver in the petitioning
States. Specifically, we proposed to
include new designation and associated
product transfer document (PTD)
language requirements and a regulatory
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mechanism for States to request the
reinstatement of the 1-psi waiver under
CAA section 211(h)(5). We are finalizing
these changes as proposed, and we
respond to comments received on the
proposed regulatory changes in the RTC
document.
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A. New Designation and Associated
PTD Language
We are finalizing as proposed a new
designation and associated PTD
language for summer CBOB in States
where the 1-psi waiver for E10 has been
removed under CAA section 211(h)(5).72
Designations and PTD language
requirements help ensure that batches of
fuel are distributed and used in a
manner consistent with EPA’s fuel
quality requirements. Without proper
designation, summer gasolines with
different volatilities intended for use in
different areas may get commingled in
a fungible system, causing the
introduction and use of non-compliant
gasoline in areas that require lowervolatility fuels in the summer.
Similarly, PTD language serves to
ensure that parties in the fuel
distribution chain are aware of the
designation of the fuel and
accompanying Federal requirements for
the distribution and use of the fuel.
Because we are finalizing requirements
for a new type of summer CBOB in this
action, we need to create a new
designation and accompanying PTD
language to ensure that the new CBOB
is distributed and used consistent with
the RVP requirements.
In this action, we are requiring
gasoline manufacturers to designate
summer CBOB for use in States where
we have removed the 1-psi waiver as
‘‘Low-RVP Summer CBOB.’’ We are also
finalizing as proposed related changes
to the PTD language requirements so
that gasoline manufacturers that
produce Low-RVP Summer CBOB can
accurately and consistently describe the
fuel designation. All other designation
and PTD provisions will still apply (e.g.,
those designations related to the
blending of ethanol). We believe this
approach is the most straight-forward
method for updating the designation
and PTD requirements for Low-RVP
Summer CBOB.
B. Regulatory Reinstatement Mechanism
We are finalizing as proposed a
regulatory mechanism for States to
request the reinstatement of the 1-psi
waiver under CAA section 211(h)(5).
This regulatory mechanism will be
72 The designation and PTD language
requirements for gasoline are located at 40 CFR
1090.1010 and 1090.1110, respectively.
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available for the petitioning States, as
well as any other State for which EPA
removes the 1-psi waiver under CAA
section 211(h)(5) in the future. The
regulations provide all States with
criteria under which such a request
could be made and granted. We
modeled the regulatory mechanism for
reinstatement of the 1-psi waiver on the
regulations in 40 CFR 1090.295 that
allow for the removal of 7.8 psi RVP
standard.73 Under the reinstatement
mechanism, we are requiring that the
State only has to request the
reinstatement of the 1-psi waiver in
order for EPA to reinstate it; however,
if the State has relied on the 1-psi
waiver removal in a SIP, either pending
or approved, EPA, in consultation with
the State, must determine if such a SIP
must be revised. If a revision is
necessary, the State must revise the SIP
and EPA must approve the revision
prior to the effective date of the
reinstatement of the 1-psi waiver. Such
requests must include a requested
effective date, and any such effective
date must be at least 90 days after EPA’s
written notification to the State that
their request has been approved.
IX. Removal of the 1-psi Waiver for E15
This action also amends 40 CFR part
1090 to reflect the 2021 court decision
in American Fuel and Petrochemical
Manufacturers (AFPM) v. EPA, 3 F.4th
373 (D.C. Cir. 2021), vacating the 1-psi
volatility waiver for E15 in 40 CFR
1090.215(b)(2). The Administrative
Procedure Act, 5 U.S.C. 553(b)(3)(B),
provides that, when an agency for good
cause finds that notice and public
procedures are impracticable,
unnecessary, or contrary to the public
interest, the agency may issue a rule
without providing notice and an
opportunity for public comment. EPA
has determined that there is good cause
for amending these provisions without
prior proposal and opportunity for
public comment because the correction
of 40 CFR part 1090 is a ministerial act
to effectuate the court order and public
notice and comment is unnecessary and
would serve no useful purpose.
Modification of the regulations to
eliminate the 1-psi waiver for E15 at 40
CFR 1090.215(b)(2) has no legal effect
beyond fulfilling the court’s vacatur in
AFPM v. EPA and is ministerial in
nature. The court issued its mandate on
September 17, 2021, at which point the
vacatur became effective.
73 We are not reopening the regulations associated
with removal of a federal 7.8 psi low-RVP program
in a given area (40 CFR 1090.295) or the regulations
that allow states to opt-out of the federal RFG
program (40 CFR 1090.290).
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A. Background
In June 2019, EPA finalized a rule
modifying volatility regulations for
gasoline-ethanol blends containing more
than 10 and up to 15 percent ethanol to
provide a 1-psi RVP volatility ‘‘waiver.’’
The rule was challenged in the D.C.
Circuit by AFPM and other groups in
June 2019. The court issued its decision
on July 2, 2021, vacating the volatility
rule, and subsequently issued the
mandate for its decision on September
17, 2021.
This action updates our regulations to
reflect the court’s vacatur of the
volatility rule. Subsequent to the
promulgation of the volatility rule and
the corresponding regulations at 40 CFR
80.27, in December 2020, EPA finalized
its fuels regulatory streamlining effort
and transposed the regulations, with
minor changes, to 40 CFR 1090.215.74
We are now making the necessary
amendments to the regulations at 40
CFR 1090.215 to be consistent with the
court’s vacatur.
We are also clarifying the status of the
‘‘substantially similar’’ determination
for gasoline made in the same action.
Because the 2019 interpretative rule 75
was promulgated solely for the purpose
of providing the 1-psi waiver to E15,
and because the court vacated the entire
volatility rule, the 2019 interpretative
rule is rescinded.76 Thus, the only
‘‘substantially similar’’ determinations
for gasoline are: (1) The 1991
interpretative rule,77 and (2) The 2008
interpretative rule.78
Finally, in the same rulemaking
action, EPA promulgated regulations
related to the RFS credit or ‘‘RIN’’
market.79 These regulations were not
challenged, were severable from the
action to extend the 1-psi waiver to E15,
and remain in place. EPA is noting this
for informational purposes only; we are
not reopening these RFS regulations
here.
B. Affected Provisions
This final rule amends the fuel quality
regulations at 40 CFR part 1090,
subparts C and R, to remove the 1-psi
waiver for E15 contained in 40 CFR
1090.215(b)(2) and 1090.1720(e) by
replacing the phrases ‘‘15 volume
percent’’ and ‘‘15 percent’’ with ‘‘10
volume percent’’ and ‘‘10 percent,’’
74 85
FR 78412 (December 4, 2020).
FR 26980 (June 10, 2019).
76 See 84 FR 26980, 26983 (June 10, 2019) (‘‘In
sum, all actions we are taking today constitute a
single, cohesive effort, and as such we do not
intend for any of these individual actions to be
severable’’).
77 56 FR 5352 (February 11, 1991).
78 73 FR 22277 (April 25, 2008).
79 84 FR 26980 (June 10, 2019).
75 84
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respectively. As explained above,
removal of the 1-psi waiver for E15
corrects the CFR to conform to the
court’s order in AFPM v. EPA, has no
legal effect beyond fulfilling the court’s
vacatur, and is ministerial in nature.
The court issued the mandate for its
decision on September 17, 2021, at
which point the vacatur became
effective.
X. Statutory and Executive Order
Reviews
Additional information about these
statutes and Executive Orders can be
found at https://www.epa.gov/lawsregulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory
Planning and Review and Executive
Order 14094: Modernizing Regulatory
Review
This action is a ‘‘significant regulatory
action,’’ as defined under section 3(f)(1)
of Executive Order 12866, as amended
by Executive Order 14094. Accordingly,
EPA submitted this action to the Office
of Management and Budget (OMB) for
Executive Order 12866 review.
Documentation of any changes made in
response to the Executive Order 12866
review is available in the docket. EPA
prepared an analysis of the potential
costs and benefits associated with this
action. This analysis is presented in the
TSD, available in the docket for this
action.
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B. Paperwork Reduction Act (PRA)
This action does not impose any new
information collection burden under the
PRA. OMB has previously approved the
information collection activities
contained in the existing regulations
and has assigned OMB control number
2060–0731. This action removes the 1psi waiver in eight States. It does not
alter practices used by the existing
recordkeeping and reporting
requirements, nor does it change the
number or type of respondents and the
manner in which they satisfy the fuel
designation and PTD requirements.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have
a significant economic impact on a
substantial number of small entities
under the RFA. The small entities
subject to the requirements of this
action are small refiners (which are
defined at 13 CFR 121.201) that produce
or distribute gasoline in Illinois, Iowa,
Minnesota, Missouri, Nebraska, Ohio,
South Dakota, or Wisconsin. This action
removes the 1-psi waiver for E10 in
these States. EPA is not aware of any
small refiner that operates in these
States. However, EPA is aware of at least
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one small refiner that distributes a
portion of the gasoline it produces to
some of the petitioning States, and thus
will be affected this action. Therefore, to
evaluate the impacts of this action on
small entities, we have conducted a
screening analysis to assess whether we
should make a finding that this action
will not have a significant economic
impact on a substantial number of small
entities.80 Currently available
information shows that the impact on
small entities from implementation of
this rule will not be significant. As
discussed in Section VII and the TSD,
we expect that refiners, including small
refiners, will be able to recover the cost
associated with the removal of the 1-psi
waiver through higher gasoline prices in
the petitioning and surrounding States.
Even if we were to assume that the cost
of producing low-RVP CBOB was not
recovered by refiners, a cost-to-sales
ratio test shows that the costs to small
refiners of the removal of the 1-psi
waiver are far less than 1 percent of the
value of their sales. Furthermore, the
removal of the 1-psi waiver in these
States does not substantively alter the
regulatory requirements on parties that
make and distribute gasoline. We have
therefore concluded that this action will
not have any significant adverse
economic impact on directly regulated
small entities.
D. Unfunded Mandates Reform Act
(UMRA)
This action does not contain an
unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C.
1531–1538, and does not significantly or
uniquely affect small governments. This
action implements mandates
specifically and explicitly set forth in
CAA section 211(h)(5) and we believe
that this action represents the least
costly, most cost-effective approach to
achieve the statutory requirements.
E. Executive Order 13132: Federalism
This action does not have federalism
implications. It will not have substantial
direct effects on the States, on the
relationship between the national
government and the States, or on the
distribution of power and
responsibilities among the various
levels of government.
F. Executive Order 13175: Consultation
and Coordination With Indian Tribal
Governments
This action does not have Tribal
implications as specified in Executive
Order 13175. This action will be
implemented at the State level and
80 See
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14773
would affect gasoline refiners, blenders,
marketers, distributors, and importers.
Tribal governments would be affected
only to the extent they produce,
purchase, and use gasoline. Thus,
Executive Order 13175 does not apply
to this action.
G. Executive Order 13045: Protection of
Children From Environmental Health
Risks and Safety Risks
EPA interprets Executive Order 13045
as applying only to those regulatory
actions that concern environmental
health or safety risks that EPA has
reason to believe may
disproportionately affect children, per
the definition of ‘‘covered regulatory
action’’ in section 2–202 of the
Executive Order. Therefore, this action
is not subject to Executive Order 13045
because it implements specific
standards established by Congress in
statutes.
H. Executive Order 13211: Actions
Concerning Regulations That
Significantly Affect Energy Supply,
Distribution, or Use
This action is not a ‘‘significant
energy action’’ because it is not likely to
have a significant adverse effect on the
supply, distribution, or use of energy.
This action removes the 1-psi waiver for
eight States. As discussed in Section V,
it will require changes to the production
and distribution of gasoline, which is
expected to have some short- and longterm impacts on gasoline supply and
cost in the affected areas, but we believe
the market will be able to accommodate
the change without any significant
disruption.
I. National Technology Transfer and
Advancement Act (NTTAA) and 1 CFR
Part 51
This action does not involve technical
standards.
J. Executive Order 12898: Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations
EPA believes that the human health
and environmental conditions that exist
prior to this action do not result in
disproportionate and adverse effects on
communities with environmental justice
concerns. Numerous studies have found
that environmental hazards such as air
pollution are more prevalent in areas
where people of color and low-income
populations represent a higher fraction
of the population compared to the
general population. In addition, there is
ample evidence that people who reside
in close proximity to major roadways
are disproportionately represented by
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people of color and people with low
income.
EPA believes that this action is not
likely to result in new disproportionate
and adverse effects on communities
with environmental justice concerns.
This is because any emissions impacts
of this action are small. As described in
Section IV.B, MOVES modeling
performed by the States in support of
their petitions demonstrated a reduction
in VOCs, CO, and NOX, as well as
potential increases in emissions of
pollutants such as PM. This action is
being implemented at the request of the
Governors of the petitioning States and
EPA lacks discretion to deny such
requests as described in Section III.
EPA additionally identified and
addressed EJ concerns by providing the
relevant emissions information in this
rulemaking action and providing an
opportunity for public comment on this
rule. We received no comments related
to EJ concerns.
The information supporting this
Executive Order review is contained in
this preamble and the ‘‘Evaluation of
MOVES Modeling and Results,’’
available in the docket for this action.
§ 1090.215
K. Congressional Review Act (CRA)
■
This action is subject to the CRA, and
the EPA will submit a rule report to
each House of the Congress and to the
Comptroller General of the United
States. This action meets the criteria set
forth in 5 U.S.C. 804(2).
§ 1090.297 Procedures for reinstating the
1.0 psi RVP allowance for E10.
List of Subjects in 40 CFR Part 1090
Environmental protection,
Administrative practice and procedure,
Air pollution control, Fuel additives,
Gasoline, Petroleum, Renewable fuel.
Michael S. Regan,
Administrator.
For the reasons set forth in the
preamble, EPA amends 40 CFR part
1090 as follows:
PART 1090—REGULATION OF FUELS,
FUEL ADDITIVES, AND REGULATED
BLENDSTOCKS
1. The authority citation for part 1090
continues to read as follows:
■
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Authority: 42 U.S.C. 7414, 7521, 7522–
7525, 7541, 7542, 7543, 7545, 7547, 7550,
and 7601.
Subpart C—Gasoline Standards
2. Amend § 1090.215 by:
a. In paragraph (b)(2), removing the
text ‘‘than 15’’ and adding in its place
the text ‘‘than 10’’; and
■ b. Revising paragraph (b)(3).
The revision reads as follows:
■
■
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Gasoline RVP Standards.
*
*
*
*
*
(b) * * *
(3)(i) RFG and SIP-controlled gasoline
that does not allow for the ethanol 1.0
psi waiver does not qualify for the
special regulatory treatment specified in
paragraph (b)(1) of this section.
(ii) Gasoline subject to the 9.0 psi
maximum RVP per-gallon standard in
paragraph (a)(1) of this section in the
following areas is excluded from the
special regulatory treatment specified in
paragraph (b)(1) of this section:
TABLE 2 TO PARAGRAPH (b)(3)(ii)—
AREAS EXCLUDED FROM THE ETHANOL 1.0 psi WAIVER
State
Counties
Illinois ..............
Iowa .................
Minnesota ........
Missouri ...........
Nebraska .........
Ohio .................
South Dakota ..
Wisconsin ........
*
All
All
All
All
All
All
All
All
.........
.........
.........
.........
.........
.........
.........
.........
Effective date
April
April
April
April
April
April
April
April
28,
28,
28,
28,
28,
28,
28,
28,
2025.
2025.
2025.
2025.
2025.
2025.
2025.
2025.
*
*
*
*
3. Add § 1090.297 to read as follows:
(a) EPA may approve a request from
a State asking to reinstate the ethanol
1.0 psi waiver specified in
§ 1090.215(b)(1) for any area (or portion
of an area) specified in
§ 1090.215(b)(3)(ii) if it meets the
requirements of paragraph (b) of this
section. If EPA approves such a request,
an effective date will be set as specified
in paragraph (c) of this section. EPA will
notify the State in writing of EPA’s
action on the request and the effective
date of the reinstatement upon approval
of the request.
(b) The request must be signed by the
Governor of the State, or the Governor’s
authorized representative, and must
include all the following:
(1) A geographic description of each
area (or portion of such area) that is
covered by the request.
(2) A description of all the means in
which emissions reduction from the
removal of the ethanol 1.0 psi waiver
are relied upon in any approved SIP or
in any submitted SIP that has not yet
been approved by EPA, if applicable.
(3) For any area covered by the
request where emissions reductions
from the removal of the ethanol 1.0 psi
waiver are relied upon as specified in
paragraph (b)(2) of this section, the
request must include the following
information:
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(i) Identify whether the State is
withdrawing any submitted SIP that has
not yet been approved.
(ii)(A) Identify whether the State
intends to submit a SIP revision to any
approved SIP or any submitted SIP that
has not yet been approved, which relies
on emissions reductions from the
removal of the ethanol 1.0 psi waiver,
and describe any control measures that
the State plans to submit to EPA for
approval to replace the emissions
reductions from the removal of the
ethanol 1.0 psi waiver.
(B) A description of the State’s plans
and schedule for adopting and
submitting any revision to any approved
SIP or any submitted SIP that has not
yet been approved.
(iii) If the State is not withdrawing
any submitted SIP that has not yet been
approved and does not intend to submit
a revision to any approved SIP or any
submitted SIP that has not yet been
approved, describe why no revision is
necessary.
(4) A requested effective date of the
reinstatement of the ethanol 1.0 psi
waiver.
(5) The Governor of a State, or the
Governor’s authorized representative,
must submit additional information
needed to administer the reinstatement
of the ethanol 1.0 psi waiver upon
request by EPA.
(c)(1) Except as specified in paragraph
(c)(2) of this section, EPA will set an
effective date of the reinstatement of the
ethanol 1.0 psi waiver as requested by
the Governor, or the Governor’s
authorized representative, but no less
than 90 days from EPA’s written
notification to the State approving the
reinstatement request.
(2) Where emissions reductions from
the removal of the ethanol 1.0 psi
waiver are included in an approved SIP
or any submitted SIP that has not yet
been approved, EPA will set an effective
date of the reinstatement of the ethanol
1.0 psi waiver as requested by the
Governor, or the Governor’s authorized
representative, but no less than 90 days
from the effective date of EPA approval
of the SIP revision that removes the
emissions reductions from the ethanol
1.0 psi waiver, and, if necessary,
provides emissions reductions to make
up for those from the ethanol 1.0 psi
waiver reinstatement.
(d) EPA will publish a document in
the Federal Register announcing the
approval of any ethanol 1.0 psi waiver
reinstatement request and its effective
date.
(e) Upon the effective date for the
reinstatement of the ethanol 1.0 psi
waiver in a subject area (or portion of
a subject area) included in an approved
E:\FR\FM\29FER1.SGM
29FER1
Federal Register / Vol. 89, No. 41 / Thursday, February 29, 2024 / Rules and Regulations
request, the ethanol 1.0 psi waiver will
apply in such subject area.
Subpart K—Batch Certification and
Designation
4. Amend § 1090.1010 by
redesignating paragraph (a)(2)(iii) as
(a)(2)(iv) and adding a new paragraph
(a)(2)(iii) to read as follows:
■
§ 1090.1010 Designation requirements for
gasoline and regulated blendstocks.
(a) * * *
(2) * * *
(iii) If the CBOB is excluded from the
special regulatory treatment for ethanol
under § 1090.215(b)(3)(ii), Low-RVP
Summer CBOB.
*
*
*
*
*
Subpart L—Product Transfer
Documents
5. Amend § 1090.1110 by
redesignating paragraph (b)(2)(i)(C) as
(b)(2)(i)(D) and adding a new paragraph
(b)(2)(i)(C) to read as follows:
■
§ 1090.1110 PTD requirements for
gasoline, gasoline additives, and gasoline
regulated blendstocks.
*
*
*
*
*
(b) * * *
(2) * * *
(i) * * *
(C) ‘‘Low-RVP CBOB. This product
does not meet the requirements for
summer reformulated gasoline.’’
*
*
*
*
*
Subpart R—Compliance and
Enforcement Provisions
§ 1090.1720
[Amended]
6. Amend § 1090.1720, in paragraphs
(e) introductory text and (e)(2), by
removing the text ‘‘15 percent’’ and
adding in its place the text ‘‘10
percent’’.
■
[FR Doc. 2024–04023 Filed 2–28–24; 8:45 am]
BILLING CODE 6560–50–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 73
khammond on DSKJM1Z7X2PROD with RULES
[MB Docket No. 22–227; FCC 23–72; FR ID
203619]
Establishing Rules for Full Power
Television and Class A Television
Stations
Federal Communications
Commission.
ACTION: Final rule; announcement of
effective date.
AGENCY:
VerDate Sep<11>2014
16:00 Feb 28, 2024
Jkt 262001
In this document, the
Commission announces that the Office
of Management and Budget (OMB) has
approved the information collection
requirements under OMB Control
Numbers 3060–1121, 3060–1320, 3060–
0009, 3060–0386, 3060–0175, 3060–
0178, 3060–0182, 3060–0190, 3060–
0320, 3060–0113, and 3060–1321
associated with the rules adopted in the
Report and Order, FCC 23–72, adopting
several rule updates for full power and
Class A television stations that no
longer have any practical effect given
the completion of the transition from
analog to digital-only operations and the
post incentive auction transition to a
smaller television band with fewer
channels. This document is consistent
with the Report and Order, which states
that the Media Bureau will publish a
document in the Federal Register
announcing the effective date for these
revised rule sections and revising the
rules accordingly.
DATES: The amendments to 47 CFR
73.619; 73.625; 73.1250; 73.1350;
73.1560; 73.1615; 73.1620; 73.1635;
73.1675; 73.1690; 73.1740; 73.1750;
73.2080; 73.3540; 73.3544; 73.3549;
73.3550; 73.3598; 73.5006; 73.6024;
73.6025, published at 89 FR 7224 on
February 1, 2024, are effective March 4,
2024.
FOR FURTHER INFORMATION CONTACT:
Cathy Williams, Office of the Managing
Director, Federal Communications
Commission, at (202) 418–2918 or
Cathy.Williams@fcc.gov.
SUPPLEMENTARY INFORMATION: This
document announces that OMB
approved the information collection
requirements in 47 CFR 73.619; 73.625;
73.1250; 73.1350; 73.1560; 73.1615;
73.1620; 73.1635; 73.1675; 73.1690;
73.1740; 73.1750; 73.2080; 73.3540;
73.3544; 73.3549; 73.3550; 73.3598;
73.5006; 73.6024; 73.6025 on February
2, 2024, and February 14, 2024,
respectively. These rule sections were
adopted in the Report and Order, FCC
23–72, published at 89 FR 7224 on
February 1, 2024. The Commission
publishes this document as an
announcement of the immediate
effective date for these revised rules.
SUMMARY:
Synopsis
As required by the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507),
the Commission is notifying the public
that it received final OMB approvals on
February 2, 2024 and February 14, 2024,
respectively, for the information
collection requirements contained in 47
CFR 73.619; 73.625; 73.1250; 73.1350;
73.1560; 73.1615; 73.1620; 73.1635;
73.1675; 73.1690; 73.1740; 73.1750;
PO 00000
Frm 00033
Fmt 4700
Sfmt 4700
14775
73.2080; 73.3540; 73.3544; 73.3549;
73.3550; 73.3598; 73.5006; 73.6024;
73.6025. Under 5 CFR part 1320, an
agency may not conduct or sponsor a
collection of information unless it
displays a current, valid OMB Control
Number.
No person shall be subject to any
penalty for failing to comply with a
collection of information subject to the
Paperwork Reduction Act that does not
display a current, valid OMB Control
Number. The OMB Control Numbers for
the information collection requirements
in 47 CFR 73.619; 73.625; 73.1250;
73.1350; 73.1560; 73.1615; 73.1620;
73.1635; 73.1675; 73.1690; 73.1740;
73.1750; 73.2080; 73.3540; 73.3544;
73.3549; 73.3550; 73.3598; 73.5006;
73.6024; 73.6025 are 3060–1121, 3060–
1320, 3060–0009, 3060–0386, 3060–
0175, 3060–0178, 3060–0182, 3060–
0190, 3060–0320, 3060–0113, and 3060–
1321.
The foregoing notice is required by
the Paperwork Reduction Act of 1995,
Public Law 104–13, October 1, 1995,
and 44 U.S.C. 3507.
The total annual reporting burdens
and costs for the respondents are as
follows:
OMB Control Number: 3060–1320.
OMB Approval Date: February 2,
2024.
OMB Expiration Date: February 28,
2027.
Title: Section 73.1750,
Discontinuance of operation; Section
73.3549, Request for extension of time
to operate without required monitors,
indicating instruments, and EAS
encoders and decoders; § 73.3550,
Requests for new or modified call sign
assignments.
Form Number: N/A.
Respondents: Business or other forprofit entities; not for-profit institutions.
Estimated Number of Respondents
and Responses: 300 respondents and
300 responses.
Estimated Time per Response: 0.50
hours.
Frequency of Response:
Recordkeeping requirement; on
occasion reporting requirement.
Obligation to Respond: Required to
obtain or retain benefits. The statutory
authority for this information collection
is contained in Sections 154(i) and
325(a) of the Communications Act of
1934, as amended.
Estimated Total Annual Burden: 150
hours.
Total Annual Cost: No cost.
Needs and Uses: The Commission
adopted on September 18, 2023, the
Report and Order (R&O), Amendment of
Part 73 of the Commission’s Rules to
E:\FR\FM\29FER1.SGM
29FER1
Agencies
[Federal Register Volume 89, Number 41 (Thursday, February 29, 2024)]
[Rules and Regulations]
[Pages 14760-14775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-04023]
=======================================================================
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 1090
[EPA-HQ-OAR-2022-0513; FRL-9845-02-OAR]
RIN 2060-AV73
Request From States for Removal of Gasoline Volatility Waiver
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: Pursuant to provisions specified by the Clean Air Act (CAA),
the Governors of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio,
South Dakota, and Wisconsin submitted petitions requesting that EPA
remove the 1-pound per square inch (psi) Reid vapor pressure (RVP)
waiver for summer gasoline-ethanol blended fuels containing 10 percent
ethanol (E10). EPA is acting on those petitions by removing the 1-psi
waiver in those States effective April 28, 2025. This action also
finalizes regulatory amendments to implement the removal of the 1-psi
waiver for E10 in those States, as well as a regulatory process by
which a State may request to reinstate the 1-psi waiver. Finally,
consistent with a decision issued by the United States Court of Appeals
for the D.C. Circuit on July 2, 2021, this action removes regulations
that extended the 1-psi waiver to gasoline-ethanol blends between 10
and 15 percent ethanol (E15).
DATES: This rule is effective on April 29, 2024.
ADDRESSES: EPA has established a docket for this action under Docket ID
No. EPA-HQ-OAR-2022-0513. All documents in the docket are listed on the
https://www.regulations.gov website. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material is not available on the internet and
will be publicly available only in hard copy form. Publicly available
docket materials are available electronically through https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: For questions regarding this action,
contact Lauren Michaels, Office of Transportation and Air Quality,
Compliance Division, Environmental Protection Agency, 2000 Traverwood
Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4640; email
address: [email protected].
SUPPLEMENTARY INFORMATION:
Does this action apply to me?
Entities potentially affected by this final rule are those involved
with the production, distribution, and sale of transportation fuels,
including gasoline and diesel fuel. Potentially affected categories
include:
------------------------------------------------------------------------
Examples of
Category NAICS \1\ code potentially affected
entities
------------------------------------------------------------------------
Industry..................... 211130 Natural gas liquids
extraction and
fractionation.
Industry..................... 221210 Natural gas
production and
distribution.
Industry..................... 324110 Petroleum refineries
(including
importers).
Industry..................... 325110 Butane and pentane
manufacturers.
Industry..................... 325193 Ethyl alcohol
manufacturing.
Industry..................... 325199 Manufacturers of
gasoline additives.
Industry..................... 424710 Petroleum bulk
stations and
terminals.
Industry..................... 424720 Petroleum and
petroleum products
wholesalers.
Industry..................... 447110, 447190 Fuel retailers.
Industry..................... 454310 Other fuel dealers.
Industry..................... 486910 Natural gas liquids
pipelines, refined
petroleum products
pipelines.
Industry..................... 493190 Other warehousing and
storage--bulk
petroleum storage.
------------------------------------------------------------------------
\1\ North American Industry Classification System (NAICS).
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely to be affected by this
action. This table lists the types of entities that EPA is now aware
could potentially be affected by this action. Other types of entities
not listed in the table could also be affected. To determine whether
your entity would be affected by this action, you should carefully
examine the applicability criteria in 40 CFR part 1090. If you have any
questions regarding the applicability of this action to a particular
entity, consult the person listed in the FOR FURTHER INFORMATION
CONTACT section.
Table of Contents
I. Executive Summary
II. Volatility Control Background and History
III. Statutory Authority and Provisions To Remove the 1-psi Waiver
IV. Petitions for Removal of the 1-psi Waiver and Supporting
Documentation
A. Petition Background and History
B. Evaluation of Petitions for Removal of the 1-psi Waiver
V. Fuel System Impacts
A. Production
B. Distribution
C. Retail Operations
VI. Implementation and Effective Date
A. Statutory Provisions
B. Finding of Insufficient Supply for 2024 and Renewal of
Extension of Effective Date
VII. Cost and Price Impacts
VIII. Associated Regulatory Provisions
[[Page 14761]]
A. New Designation and Associated PTD Language
B. Regulatory Reinstatement Mechanism
IX. Removal of the 1-psi Waiver for E15
A. Background
B. Affected Provisions
X. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 14094: Modernizing Regulatory Review
B. Paperwork Reduction Act (PRA)
C. Regulatory Flexibility Act (RFA)
D. Unfunded Mandates Reform Act (UMRA)
E. Executive Order 13132: Federalism
F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
I. National Technology Transfer and Advancement Act (NTTAA) and
1 CFR Part 51
J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
K. Congressional Review Act (CRA)
I. Executive Summary
In this action, EPA is responding to petitions from eight State
Governors to remove the 1-psi (pound per square inch) waiver for
gasoline-ethanol blends containing 10 percent ethanol (E10). The
Governors made their requests pursuant to Clean Air Act (CAA) section
211(h)(5), which provides that EPA shall remove the 1-psi waiver by
regulation upon a demonstration by a Governor that the 1-psi waiver
increases emissions in their State.
After review of the modeling results presented by the Governors in
their petitions, on March 6, 2023, EPA proposed to remove the 1-psi
waiver with an effective date of April 28, 2024--and sought comment on
delaying the effective date to April 28, 2025--in the following eight
States: Illinois, Iowa, Nebraska, Minnesota, Missouri, Ohio, South
Dakota, and Wisconsin.\1\ On March 21, 2023, EPA held a public hearing
on the proposal, at which various perspectives on the proposed action
were presented, and subsequently many comments were submitted to EPA on
the proposed action. After the close of the public comment period, EPA
also received numerous petitions to delay the proposed effective date
of the removal of the 1-psi waiver.\2\ Following review of public
comments on the proposal and the extension petitions received, in this
action EPA is removing the 1-psi waiver and instead applying the 9.0
psi RVP (Reid Vapor Pressure) standard under CAA section 211(h)(1)
effective April 28, 2025, in the following eight States: Illinois,
Iowa, Nebraska, Minnesota, Missouri, Ohio, South Dakota, and Wisconsin.
---------------------------------------------------------------------------
\1\ 88 FR 13758.
\2\ We refer to these petitions as ``extension petitions''
throughout this preamble.
---------------------------------------------------------------------------
Throughout this document we discuss key comments provided by
stakeholders on the proposal and provide our response. Additional
detail is provided in the Response to Comments (RTC) document and
Technical Support Document (TSD) \3\ for this action.
---------------------------------------------------------------------------
\3\ ``Request From States for Removal of Gasoline Volatility
Waiver: Technical Support Document and Cost Analysis,'' available in
the docket for this action.
---------------------------------------------------------------------------
II. Volatility Control Background and History
EPA first took regulatory action to control the volatility of
gasoline in 1987.\4\ Because higher gasoline volatility leads to higher
evaporative emissions, EPA regulates the RVP--a measure of fuel
volatility--of gasoline during summer months in order to reduce
volatile organic compound (VOC) emissions that contribute to the
formation of smog (ground-level ozone).\5\ The volatility of fuel
depends on the refinery's decisions in formulating its gasoline.
Subsequent to EPA's actions, Congress enacted the CAA Amendments of
1990, which included statutory volatility provisions for summer
gasoline. These provisions largely codified EPA's regulatory approach,
including establishing a 9.0 psi RVP standard for gasoline volatility
in the summer.\6\ Because blending ethanol into gasoline increases the
volatility of the resulting fuel blend due to chemical differences
between ethanol and gasoline, Congress also codified a 1-psi waiver for
E10, allowing such blends to have a 1.0-psi higher RVP than otherwise
allowed for gasoline, consistent with EPA's prior regulatory
approach.\7\ This allowance only applies to gasoline-ethanol blends
containing between 9 and 10 percent ethanol, and does not extend to
gasoline-ethanol blends containing greater than 10 percent ethanol.\8\
The 1-psi waiver also does not apply to reformulated gasoline (RFG).
---------------------------------------------------------------------------
\4\ See 52 FR 31274 (August 19, 1987); Subsequent regulatory
actions occurred in 1989 and 1990. 54 FR 11868 (March 22, 1989); 55
FR 23658 (June 11, 1990).
\5\ Gasoline must have volatility in the proper range to prevent
driveability, performance, and emissions problems. If the volatility
is too low, the gasoline will not ignite properly; if the volatility
is too high, the vehicle may experience vapor lock. Importantly for
this action, excessively high volatility also leads to increased
evaporative emissions from the vehicle. Vehicle evaporative emission
control systems are designed and certified on gasoline with a
volatility of 9.0 psi RVP. Higher volatility gasoline may overwhelm
the vehicle's evaporative control system, leading to a condition
described as ``breakthrough'' of the cannister and mostly
uncontrolled evaporative emissions.
\6\ CAA section 211(h)(1). CAA section 211(h)(1) requires EPA to
establish volatility requirements--that is, a restriction on RVP--
during the high ozone season. To implement these requirements, EPA
defines ``high ozone season'' or ``summer season'' at 40 CFR 1090.80
as ``the period from June 1 through September 15 for retailers and
wholesale purchaser consumers, and May 1 through September 15 for
all other persons, or an RVP control period specified in a state
implementation plan if it is longer.'' In general practice by
industry and for purposes of this preamble, the high ozone season is
referred to as the ``summer'' or ``summer season'' and gasoline
produced to be used during the high ozone season is called ``summer
gasoline.'' EPA's regulations do not impose any volatility
requirements on any type of blend of gasoline outside of the summer
season.
\7\ CAA section 211(h)(4).
\8\ The statutory 1-psi waiver is codified at 40 CFR
1090.215(a).
---------------------------------------------------------------------------
At the time the provision was enacted, the 1-psi waiver applied to
a relatively small portion of the gasoline sold in the United States.
Today, however, almost all gasoline sold is E10, and thus the 1-psi
waiver increases the volatility of most gasoline.
On April 28, 2022, the Governors of Illinois, Iowa, Kansas,
Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin
submitted a petition for the removal of the 1-psi waiver for E10 in
their States beginning in the summer of 2023, pursuant to CAA section
211(h)(5).\9\ On June 10, 2022, the Governor of Ohio also submitted a
petition requesting the removal of the 1-psi waiver in that State.\10\
On July 21, 2022, the Governor of Kansas notified EPA that they were
rescinding their petition for removal of the 1-psi waiver in
Kansas.\11\ On October 13, 2022, the Governor of North Dakota notified
EPA that they were rescinding their petition for removal of the 1-psi
waiver in North Dakota.\12\ On December 21, 2022, the Governor of
Missouri submitted a petition requesting the removal of the 1-psi
waiver in that State.\13\ This action refers to the eight remaining
States of Illinois, Iowa, Minnesota, Missouri, Nebraska, Ohio, South
Dakota, and Wisconsin as the ``petitioning states.'' The petitions
included modeling results indicating reductions in VOCs, nitrogen
[[Page 14762]]
oxides (NOX), and carbon monoxide (CO).
---------------------------------------------------------------------------
\9\ ``April 28, 2022 Letter from Eight States,'' available in
the docket for this action.
\10\ ``June 10, 2022 Letter from Ohio,'' available in the docket
for this action.
\11\ ``July 21, 2022 Letter from Kansas,'' available in the
docket for this action.
\12\ ``October 12, 2022 Letter from North Dakota,'' available in
the docket for this action.
\13\ ``December 21, 2022 Letter from Missouri,'' available in
the docket for this action.
---------------------------------------------------------------------------
III. Statutory Authority and Provisions To Remove the 1-psi Waiver
This rulemaking modifies EPA's fuel quality regulations in 40 CFR
part 1090 to remove the 1-psi waiver that is applicable to fuel blends
containing gasoline and 10 percent ethanol for the petitioning States.
While we proposed to make such a change effective for the summer of
2024, after further careful consideration of comments and consultation
with various agencies we are instead finalizing removal of the 1-psi
waiver in these States beginning April 28, 2025.
CAA section 211(h)(1) requires EPA to ``promulgate regulations
making it unlawful . . . during the high ozone season . . . to sell . .
. or introduce into commerce gasoline with a Reid Vapor Pressure in
excess of 9.0 pounds per square inch (psi).'' For nonattainment areas,
CAA section 211(h)(1) also allows EPA to set a lower (i.e., more
stringent) RVP standard, as well as to define the term ``high ozone
season.'' CAA section 211(h)(4) provides in relevant part that ``[f]or
fuel blends containing gasoline and 10 percent denatured anhydrous
ethanol, the Reid vapor pressure limitation under this subsection shall
be one pound per square inch (psi) greater than the applicable Reid
vapor pressure limitations established under [section 211(h)(1)].'' CAA
section 211(h)(5), which was enacted as part of the Energy Policy Act
of 2005 (EPAct), provides in relevant part that ``[u]pon notification,
accompanied by supporting documentation, from the Governor of a State
that the [waiver in section 211(h)(4)], will increase emissions that
contribute to air pollution in any area of the State, the Administrator
shall, by regulation, apply, [the volatility limit under section
211(h)(1)].'' Thus, regulatory action under CAA section 211(h)(5) would
remove the 1-psi waiver for E10 and generally apply the RVP standard
under CAA section 211(h)(1).
Prior to the April 28, 2022 petition, no Governor had ever
submitted a petition under CAA section 211(h)(5) to EPA, and thus we
are interpreting this statutory provision for the first time in this
action. In this context, we find that the use of the prescriptive
statutory language ``shall'' provides limited, if any, discretion for
EPA to consider other issues such as economic impacts of removing the
1-psi waiver. Such impacts may instead be taken into consideration by a
Governor when deciding whether to submit a petition to EPA.\14\ Here,
EPA's role is only to evaluate the supporting documentation provided by
the Governors.\15\ If EPA concludes that the supporting documentation,
as required by the statute, demonstrates emissions increases with the
1-psi waiver in place, then CAA section 211(h)(5) requires EPA to
promulgate regulations to remove the 1-psi waiver as requested.
---------------------------------------------------------------------------
\14\ Considerations like this were cited by the Governors of
Kansas and North Dakota in rescinding their petitions.
\15\ Legislative history suggests that the supporting
documentation need not be as stringent as that called for under CAA
section 211(c)(4)(C). See Senate Report 106-426 at 12 (September 28,
2000). Under CAA section 211(c)(4)(C) a state must make a
``necessity'' showing prior to EPA approval of a fuel measure into
the state implementation plan. The ``Guidance on Use of Opt-in to
RFG and Low RVP Requirements in Ozone SIPs,'' August 1997, gives
further guidance on factors EPA is likely to consider in making a
finding of ``necessity'' under CAA section 211(c)(4)(C).
---------------------------------------------------------------------------
In response to the proposal, we received comments suggesting that
the Governors cannot meet the statutory criteria in CAA section
211(h)(5) because E10 is now the dominant fuel in the marketplace.
Commenters suggested that the statutory language that the 1-psi waiver
``will increase emissions'' cannot be satisfied, because any emissions
impacts from the 1-psi waiver have already occurred. We disagree with
the comment. CAA section 211(h)(5)(A)--which was promulgated in 2005--
requires EPA to remove the 1-psi waiver if it ``will increase emissions
that contribute to air pollution . . . during the high ozone season.''
The term ``will'' connotes consideration of emissions that are expected
in the future and as relevant here during the ``high ozone season.''
\16\ Further, as instructed in CAA section 211(h)(1), we have defined
``high ozone season'' as the period from ``June 1 through September 15
for retailers and [whole purchaser consumers], and May 1 through
September 15 for all other persons.'' \17\ We therefore read the phrase
as calling for the consideration of emissions that are expected in the
petitioning States during future high ozone seasons and conclude that
because the Governors have demonstrated that the 1-psi waiver will
increase VOC emissions during the high ozone season, the statutory
criteria for removal of the 1-psi waiver has been met. We further
address this comment in the RTC document.
---------------------------------------------------------------------------
\16\ This reading is like, for example, our reading of ``will''
in CAA section 110(a)(2)(D)(i). (The term ``will'' in CAA section
110(a)(2)(D) means that State implementation plans are required to
eliminate the appropriate amounts of emissions that presently, or
that are expected in the future, contribute significantly to
nonattainment downwind. 63 FR 57375 (October 27, 1998)).
\17\ 40 CFR 1090.80.
---------------------------------------------------------------------------
Additionally, as we posited in the proposal, we do not interpret
this provision as requiring a demonstration of a reduction in emissions
of all pollutants that contribute to air pollution in the petitioning
States, as advocated for by some commenters. Such a demonstration could
not have been contemplated by Congress, as lowering the volatility of
fuel was specifically the intent set out in CAA section 211(h)(1),
which calls for EPA to set RVP standards to address ``evaporative
emissions.'' As such, reducing the volatility of gasoline would be
expected to have differing impacts on emissions of different
pollutants.\18\ Further, Congress was silent on the air pollutants that
EPA should consider in responding to petitions for removal of the 1-psi
waiver. Specifically, under CAA section 211(h)(5), EPA is to remove the
1-psi waiver if it ``increase[s] emissions that contribute to air
pollution.'' This contrasts with, for example, CAA section
110(a)(2)(D)(i), which prohibits sources in a State from emitting ``any
air pollutant which will contribute significantly to nonattainment'' in
another State. Air pollution could result from a myriad of sources,
including listed hazardous air pollutants, criteria pollutants, and
greenhouse gases, and thus would appear to be a rather expansive term.
Reducing RVP, however, is a volatility control measure as explained
earlier in Section II. In short, CAA section 211(h)(1) requires EPA to
set RVP standards to address ``evaporative emissions.'' Additionally,
EPA has consistently explained that adding 10 percent ethanol to
gasoline causes roughly a 1.0 psi RVP increase in the blend's
volatility, which is the premise for the 1-psi waiver contained in CAA
section 211(h)(4) and the subject of this action.\19\ EPA is of the
view, therefore, that it is reasonable to consider ``air pollution''
emanating from emissions of such gasoline and thus, that it may be most
appropriate to evaluate the impact of the 1-psi waiver for E10 on VOC
emissions in addressing petitions to remove the 1-psi waiver under CAA
section 211(h)(5). We thus find that demonstration of increased VOC
emissions with the 1-psi waiver in place is sufficient to grant the
petitions for
[[Page 14763]]
removal of the waiver. Even were EPA to look at the modeled emissions
impacts on several other pollutants (e.g., CO and NOX),
those reductions, in addition to the reduction in VOCs, also satisfy
the requirements of the statute and justify granting the petitions.
---------------------------------------------------------------------------
\18\ For an example of analysis and modeling of emission impacts
available at the time CAA section 211(h)(5) was enacted, see
``User's Guide to MOBILE6.1 and MOBILE6.2: Mobile Source Emission
Factor Model,'' EPA-420-R-02-028, October 2002.
\19\ See, e.g., 52 FR 31274 at 31292 (August 19, 1987).
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Further, EPA views the Motor Vehicle Emissions Simulator (MOVES) as
an appropriate tool for use in modeling the emission impacts required
by CAA section 211(h)(5). The MOVES runs performed by the petitioning
States compared emissions from motor vehicles and nonroad vehicles and
equipment with and without the 1-psi waiver for E10 in each State in
the summer. In the past, similar analyses have been used to support
prior EPA actions for Federal and State fuel programs.\20\
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\20\ For example, on June 7, 2017, EPA published a final rule to
relax the federal 7.8 psi RVP standard in the Nashville, TN area (82
FR 26354) and on March 12, 2021, EPA published two final rules that
removed approved regulations from the Kansas and Missouri SIPs that
required the sale of 7.0 psi RVP gasoline in the Kansas City, KS-MO
area (86 FR 14000 and 86 FR 14007).
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IV. Petitions for Removal of the 1-psi Waiver and Supporting
Documentation
A. Petition Background and History
During the fall of 2021, EPA received several letters from States
requesting that EPA engage in a dialogue about mechanisms to provide
parity between E10 and E15 with respect to gasoline volatility
standards.\21\ Specifically, the letters referred to CAA section
211(h)(5) and inquired about as to what type of ``supporting
documentation'' should accompany such a request. EPA organized and
participated in a series of meetings with representatives from various
Midwestern States that had expressed interest in removing the 1-psi
waiver. In those meetings, EPA indicated that MOVES modeling would be
an appropriate tool to use for this purpose given its ability to model
the emissions impacts of changes in gasoline volatility and given our
past reliance on MOVES modeling runs in similar contexts.
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\21\ See ``October 13, 2021 Letter from Kansas,'' and ``November
4, 2021 Letter from Seven States,'' available in the docket for this
action.
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On April 28, 2022, the Governors of Illinois, Iowa, Kansas,
Minnesota, Nebraska, North Dakota, South Dakota, and Wisconsin
submitted a joint petition to EPA for the removal of the 1-psi waiver
for E10 in their respective States. The petition specifically requested
the removal of the 1-psi waiver for E10 as a permanent solution for
providing year-round E15 in those States beginning in the summer of
2023. As accompanying documentation, the petition provided quantified
reductions in VOC, NOX, and CO emissions as a result of
removing the 1-psi waiver in each State based on MOVES modeling.
Subsequent to this submittal, the Governors of Kansas and North Dakota
rescinded their petitions to remove the 1-psi waiver for E10 in those
States.\22\ Therefore, we are not taking any action on the 1-psi waiver
for E10 in Kansas and North Dakota in this action.
---------------------------------------------------------------------------
\22\ See ``July 21, 2022 Letter from Kansas,'' and ``October 12,
2022 Letter from North Dakota,'' available in the docket for this
action.
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On June 10, 2022, the Governor of Ohio also submitted a petition
requesting the removal of the 1-psi waiver for E10 beginning in the
summer of 2023. The petition provided quantified reductions in VOC,
NOX, and CO emissions in Ohio based on MOVES modeling.
On December 21, 2022, the Governor of Missouri also submitted a
petition requesting the removal of the 1-psi waiver for E10 beginning
in the summer of 2023. The petition provided quantified reductions in
VOC, NOX, and CO emissions in Missouri based on MOVES
modeling.
Subsequent to submission of the petitions, all petitioning States
except Missouri provided EPA with additional emissions modeling
documentation, including for particulate matter (PM) and benzene.\23\
The original data submitted showed a decrease in VOC, NOX,
and CO emissions with removal of the 1-psi waiver for E10, while the
additional data demonstrated an increase in PM for both nonroad and on-
road emissions with removal of the 1-psi waiver. The benzene results
demonstrated an increase in benzene on-road emissions and a decrease in
benzene nonroad emissions. While the additional data on modeled
emissions impacts on other pollutants may not be necessary to make the
statutory demonstration, it does provide additional information about
the potential emissions impacts of this action.
---------------------------------------------------------------------------
\23\ See ``Emissions Impacts of the Elimination of the 1-psi RVP
Waiver for E10,'' May 9, 2022; and ``Emissions Impacts of the
Elimination of the 1-psi RVP Waiver for E10 in Ohio,'' June 10,
2022, available in the docket for this action. While we did not
receive additional information from Missouri about other pollutants
as we received from the other petitioning states, we anticipate
directionally similar trends as shown in the information from the
other states. RVP reduction is a volatility control measure and EPA
has consistently explained that adding 10 percent ethanol to
gasoline causes roughly a 1.0 psi RVP increase in the blend's
volatility. As EPA explained in its rulemakings to regulate
volatility of fuel that preceded enactment of CAA section 211(h),
evaporative hydrocarbon emissions are VOCs and contribute to the
formation of ozone in the atmosphere, particularly in the summer
months due to direct sunlight and high ambient temperatures. EPA
regulated the volatility of gasoline to control the emissions of
VOCs. Congress, in enacting CAA section 211(h), which largely
codified EPA's volatility regulations, thus also logically intended
to address VOCs by requiring volatility controls. It is therefore
reasonable and most appropriate to evaluate the impact of the 1-psi
volatility waiver for E10 on VOC emissions in addressing petitions
to remove the 1-psi waiver under CAA section 211(h)(5). See also 52
FR 31274 (August 19, 1987); 54 FR 11868 (March 22, 1989); and 55 FR
23658 (June 11, 1990).
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All the petitioning States requested removal of the 1-psi waiver in
all areas within their State where the limitation under CAA section
211(h)(4) applies. Therefore, the requests did not include areas within
the States where RFG is required because the 1-psi waiver does not
apply to RFG. The petitioning States also requested that the removal of
the 1-psi waiver should take effect for the 2023 high ozone season,
without further discussion. The States noted that rescinding the 1-psi
waiver for E10 would support year-round sales of E15.
B. Evaluation of Petitions for Removal of the 1-psi Waiver
The petitioning States provided technical documentation with their
petitions to demonstrate the reduction of emissions with the removal of
the 1-psi waiver as required by CAA section 211(h)(5) in the form of
MOVES modeling results.\24\ The results for each State were based on a
single day in July 2023, which is during the high ozone season.
Comparative results demonstrate the change in emissions from the
current 10.0 psi RVP standard to the alternative 9.0 psi RVP standard
as contemplated by the statute.\25\ A summary of the emissions impacts
of removing the 1-psi waiver for E10 for each State is provided in
Table V-1.\26\
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\24\ EPA developed MOVES to estimate air pollution emissions
from on-road and nonroad mobile sources.
\25\ Further information about the MOVES runs, including inputs
and nonroad data, is available in the docket for this action.
\26\ EPA's evaluation of the MOVES model input data and
assumptions, and results, can be found in the TSD.
[[Page 14764]]
Table V-1--Change of Mobile Source Emissions in 2023 MOVES3.01 Sources From 10.0 psi to 9.0 psi RVP
--------------------------------------------------------------------------------------------------------------------------------------------------------
Pollutant/precursor
-------------------------------------------------------------------------------------------------------
State VOCs CO NOX PM2.5 PM10 Benzene Toluene Ethylbenzene Xylene
(percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Illinois........................................ -0.9 -0.19 -0.05 0.09 0.10 -0.2 -1.5 -0.9 -0.9
Iowa............................................ -1.8 -0.44 -0.09 0.14 0.15 -0.1 -3.3 -2.1 -2.1
Minnesota....................................... -2.7 -0.52 -0.09 0.15 0.16 -1.3 -4.2 -3.0 -3.1
Missouri........................................ -0.66 -0.41 -0.14 N/A N/A N/A N/A N/A N/A
Nebraska........................................ -2.6 -0.48 -0.09 0.17 0.18 -0.6 -4.4 -2.9 -3.0
Ohio............................................ -1.6 -0.45 -0.13 0.30 0.32 0.08 -2.8 -2.0 -2.0
South Dakota.................................... -2.9 -0.53 -0.06 0.08 0.08 -1.1 -4.8 -3.4 -3.3
Wisconsin....................................... -1.7 -0.44 -0.10 0.21 0.22 -0.3 -2.7 -1.8 -1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
As with the proposal, we have assessed the supporting documentation
provided by the petitioning States and find that the MOVES modeling
results submitted to EPA demonstrate a reduction in emissions of
multiple pollutants (e.g., VOCs, CO, and NOX) that
contribute to air pollution within each State upon removal of the 1-psi
waiver for E10, as required under CAA section 211(h)(5).\27\ We note
that the same documentation also shows an increase in emissions of
other pollutants such as PM. As discussed in Section III, we do not
interpret the statute as requiring reductions in all pollutants.
Documentation of air pollutant emissions reductions--particularly
VOCs--is sufficient. While some commenters suggested that EPA should
not focus on particular pollutants and ignore others, we instead
conclude that demonstration of a decrease in VOC emissions is
sufficient to satisfy the statutory requirements and justify granting
the petitions.
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\27\ Evaporative emissions from gasoline--specifically VOCs--are
precursors to the formation of tropospheric ozone and contribute to
the nation's ground-level ozone problem. NOX and CO can
also be ozone precursors. Exposure to ground level ozone can reduce
lung function (thereby aggravating asthma or other respiratory
conditions), increase susceptibility to respiratory infection, and
may contribute to premature death in people with heart and lung
disease.
---------------------------------------------------------------------------
Therefore, based on the Governors' petitions and the supporting
documentation provided, we are removing the 1-psi waiver for E10 sold
in the petitioning States and, as required by CAA section 211(h)(5),
promulgating the 9.0 psi RVP standard contained in CAA section
211(h)(1) for the petitioning States. For the reasons discussed in
Section VIII., such a change will be effective on April 28, 2025, given
our determination of insufficient supply in 2023 and the renewal of
that extension for one year based on a determination of insufficient
supply in 2024.
V. Fuel System Impacts
In this section, we discuss the potential impacts of removing the
1-psi waiver in the petitioning States on the fuel production and
distribution system, including impacts that would potentially affect
gasoline refineries, pipelines, fuel terminals, retail outlets, and,
ultimately, consumers.\28\ Significant portions of this discussion were
provided in the proposal, and have now been updated based on additional
information provided from commenters and discussions with industry. We
received comment from ethanol interests suggesting that gasoline supply
concerns were overstated and manageable, even for 2023. We also
received comment and supporting analysis from refining and pipeline
stakeholders expressing concern over the gasoline supply and resulting
cost and price impacts in support of their requests to further delay
implementation of the 1-psi waiver removal, as well as additional
petitions requesting delay to 2025 or later. The discussion in this
section is not specific to a particular year or determination of
sufficiency of supply. Section VI provides our determination of
insufficient supply for 2024.
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\28\ Further detail on this topic is available in the TSD.
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In short, this action will require a lower-volatility conventional
gasoline before oxygenate blending (CBOB) \29\ to be produced by
refineries and distributed by pipelines and terminals, resulting in a
lower-volatility blended fuel ultimately sold at retail outlets in the
petitioning States.\30\
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\29\ Gasoline before oxygenate blending (BOB) means gasoline for
which a gasoline manufacturer has accounted for oxygenate (e.g.,
denatured fuel ethanol) added downstream. See 40 CFR 1090.90. BOB is
subject to all requirements and standards that apply to gasoline
under EPA's fuel quality regulations, and refineries typically
formulate their BOBs with the intent that it will be blended
downstream with ten percent ethanol content to maintain compliance
with EPA and industry specifications. Conventional BOB (CBOB) is BOB
produced or imported for areas outside of RFG areas otherwise known
as conventional areas.
\30\ Because the gasoline distribution system has been
configured to utilize 10 percent ethanol and optimized to utilize
the octane value of ethanol, we expect ethanol will be blended at
least at the same levels it is blended today. Thus, we anticipate
that E10 will continue to be the dominant form of gasoline supplied
to the region, but will now be blended into a lower-volatility
blendstock produced by refineries.
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We first note that volatility controls for gasoline differ across
various States and regions within States. Summer gasoline for use in
the continental U.S. must comply with either the Federal RVP standard
of 9.0 psi or the more stringent RVP standard of 7.8 psi, unless the
summer gasoline is either for use in an RFG covered area, is subject to
California's gasoline regulations, or EPA has waived preemption and
approved a State request to adopt a more stringent RVP standard into a
State Implementation Plan (SIP). Most of the U.S. utilizes
``conventional gasoline,'' for which the Federal RVP standard is 9.0
psi, with a 1.0 psi waiver for gasoline blended with 10 percent
ethanol. There are also areas that utilize conventional gasoline for
which the Federal RVP standard is 7.8 psi, and in such regions, the 1.0
psi waiver also applies for gasoline blended with 10 percent
ethanol.\31\ Several States have ``boutique'' low-RVP fuel programs or
SIP programs \32\ that allow the 1-psi waiver for gasoline blended with
10 percent ethanol.\33\ Some boutique fuel programs, or SIP-approved
fuel programs, however, disallow the 1-psi waiver for gasoline blended
with 10 percent ethanol and in those areas, such gasoline must meet the
applicable State RVP standard of either 9.0 psi, 7.8 psi, or 7.0
psi.\34\ Additionally, approximately 30 percent of the
[[Page 14765]]
gasoline sold in the U.S. is RFG, which must meet a 7.4 psi RVP
standard.\35\ The 1-psi waiver does not apply to RFG, and thus E10 that
is sold in RFG areas must meet the 7.4 psi RVP standard. This action
removes the 1-psi waiver only for conventional gasoline that is sold in
the petitioning States and does not apply to gasoline sold in RFG or
SIP program areas. However, due to the interconnected nature of
gasoline distribution, and the changes required for a new fuel type,
impacts on gasoline quality and supply are expected to extend beyond
the petitioning States, as further described below.
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\31\ 40 CFR 1090.215(a)(2) and (b)(1).
\32\ Of particular note for this action, seven counties in
southeast Michigan that border Ohio have an RVP standard of 7.0 psi
in the summer, with a 1-psi waiver for E10.
\33\ See https://www.epa.gov/gasoline-standards/state-fuels.
\34\ 40 CFR 1090.215(b)(3). See also https://www.epa.gov/gasoline-standards/state-fuels.
\35\ 40 CFR 1090.215(a)(3). The Chicago and St. Louis areas are
such RFG areas.
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Before discussing the various steps required to produce and
distribute the new lower-volatility gasoline,\36\ it is useful to
describe the gasoline fuel supply system that is interdependent on its
different parts to bring a fuel to market. The first step is fuel
production, in which refineries refine crude oil using various
processing units and then blend the various blendstocks together in
finished gasoline tanks. The next step is fuel distribution, in which
the gasoline in these tanks is transported through the fuel
distribution system to the final market, mostly by pipelines.\37\ These
pipelines transport a wide variety of fuels and other products (e.g.,
gasoline, diesel fuel, jet fuel, heating oil, petroleum blendstocks,
etc.), including an array of different grades and types of gasoline
(e.g., conventional gasoline, RFG, boutique fuels, and regular and
premium grades of each). Each grade and type of gasoline must be
segregated from other grades and types to preserve the physical
properties of each product. When a pipeline reaches a juncture where it
branches out to two different pipelines serving different gasoline
markets, a set of short-term storage tanks (``breakout tanks'') are
necessary to offload the fuel from the upstream pipeline to enable
scheduling the various fuels through the two downstream pipelines.
Pipeline systems often have many branches from upstream to downstream
pipelines to enable moving the fuel to the downstream markets, and
breakout tanks serve an important function in the fuel distribution
system. For example, there are approximately 110 breakout tank
locations within the petitioning States alone. Pipeline transportation
of gasoline to market also involves downstream product terminals and
bulk plants, which accumulate gasoline from pipelines and other bulk
distribution systems and distribute the gasoline to retail outlets via
tank trucks loaded at terminal racks. Each rack can load a premium
grade and regular grade gasoline, but some racks can load additional
grades and types of gasoline.
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\36\ We refer to this new lower-volatility gasoline as ``low-RVP
gasoline'' throughout this preamble.
\37\ If all gasoline in the country was required to shift to
low-RVP gasoline, the impacts would be limited to just refineries.
The rest of the fuel distribution system would merely distribute the
replacement low-RVP gasoline instead. However, since this action
only applies to the eight petitioning states, a new additional type
of gasoline is required for the distribution system to also handle.
---------------------------------------------------------------------------
To minimize other impacts and enable production and distribution of
low-RVP gasoline, refiners and fuel distributors will need time to make
capital investments to optimize the fuel production and distribution
system to replace the gasoline solely in the petitioning States with
low-RVP gasoline. Without capital investments, which can take two years
or more to complete, the limited availability of additional storage
tanks for the new low-RVP gasoline grades--particularly at pipeline
breakout tank locations, but also at refineries and downstream
terminals--may result in low-RVP gasoline being sold within both the
petitioning States and the immediately adjacent non-petitioning States.
This would increase the volume of low-RVP gasoline needed to be
produced and distributed to satisfy demand. Over time, we expect
refiners and fuel distributors to invest in and optimize the fuel
production and distribution system to more efficiently target low-RVP
gasoline solely to the petitioning States.
A. Production
Refiners will need to make modifications to their refinery
operations to supply low-RVP gasoline. There are 11 petroleum
refineries located within the petitioning States; that number increases
to 40 when refineries located in States that border the petitioning
States are included. Further, additional refineries outside of the
immediate region may also modify their operations to provide low-RVP
gasoline, as some of the gasoline supply for the petitioning States
also historically comes from refineries located further west, east, and
south, such as refineries in the Gulf Coast.\38\ For example, gasoline
sold in Iowa is often produced by refineries located in Texas and
distributed via pipeline. Therefore, this action could result in
changes in refinery operations both within and outside of the
petitioning States and extend to refineries in the Gulf Coast. Prior to
the implementation of this rule, most refineries producing gasoline for
use in the petitioning States produce a CBOB with an RVP of 9.0 psi
during the summer season, with the 1-psi waiver allowing the final
gasoline-ethanol blend to meet an RVP standard of 10.0 psi when 10
percent ethanol is added to the CBOB downstream. With the removal of
the 1-psi waiver and to enable the final gasoline-ethanol blend to
comply with the resulting 9.0 psi RVP standard, refineries that choose
to continue producing CBOB for use within the petitioning States will
need to make changes to their operations to reduce the volatility of
the CBOB distributed to these States to ~8.0 psi.\39\ For most
refineries operating within and near the petitioning States, removal of
the 1-psi waiver will likely result in the refinery choosing to only
produce low-RVP CBOB. Refineries operating outside the petitioning
States will choose to either produce only low-RVP CBOB for distribution
to the petitioning and adjacent States, continue to produce only the
current ~9.0 psi RVP CBOB for distribution to areas outside the
petitioning States, or both. The limited availability of existing
blending/storage tanks at a refinery to handle both gasoline types may
prevent the refinery from producing both blendstocks without further
capital investment.\40\ One commenter submitted a survey with data from
refiners in and around petitioning States, which provided information
regarding what refiners may have to do to meet the 9.0 psi RVP standard
and is further discussed below.\41\ Nevertheless, at this time, we
cannot predict which of the refineries that currently produce fuel for
use in the petitioning States will choose to produce low-RVP CBOB for
use in the petitioning States and potentially the
[[Page 14766]]
surrounding States. Unlike a nationwide change to the RVP of CBOB, the
regional nature of this action means that not all refineries must
adjust their refining processes to reduce the RVP of their CBOB. While
it is highly likely that refineries that supply gasoline only to the
petitioning States will adjust their refinery processes to reduce the
RVP of their CBOB, these refineries could choose to avoid the necessary
investments and provide 9.0 psi RVP CBOB to non-petitioning States
instead if they are able to reach those markets.
---------------------------------------------------------------------------
\38\ According to the Energy Information Administration (EIA),
64 million barrels of gasoline were shipped from Petroleum
Administration for Defense District (PADD) 3 (Gulf Coast) into PADD
2 (Midwest), which corresponds to about 8 percent of the volume of
gasoline consumed in PADD 2. EIA, ``Petroleum & Other Liquids;
Movements by Pipeline, Tanker, Barge and Rail between PAD Districts;
PADD 3 to PADD 2,'' https://www.eia.gov/dnav/pet/pet_move_ptb_dc_R20-R30_mbbl_m.htm.
\39\ We refer to this new lower-volatility CBOB as ``low-RVP
CBOB'' throughout this preamble.
\40\ Certain areas within the petitioning states and other
states already have more stringent RVP standards during the summer.
Gasoline that refineries produce for these areas would be unaffected
by this final rule. Refineries that produce 6.8 psi RVP CBOB for 7.8
psi RVP areas, or 6.4 psi RVP RBOB for RFG areas, could expand
production of these gasoline types for use in the petitioning states
rather than create a new gasoline type at 8.0 psi RVP. This may
reduce distribution cost complexity, but in exchange increase
refinery production cost and lower gasoline production volume.
\41\ Comment submitted by the American Fuel and Petrochemical
Manufacturers (AFPM), Docket Item No. EPA-HQ-OAR-2022-0513-0077.
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Throughout the year, refineries must adjust the volatility of their
gasoline--typically lowering the volatility of the gasoline in the
summer and increasing the volatility in the winter by adjusting the
quantity of light hydrocarbons in their gasoline. Refineries typically
control gasoline volatility by adjusting the amount of butane in
gasoline, but sometimes they need to also modify the amount of pentane
or natural gas liquids (NGLs). Refineries providing fuel to the
petitioning States will have to modify their summer gasoline production
operations and potentially add capital equipment to accommodate the 9.0
psi RVP standard. A refinery's ability to adapt to the 9.0 psi RVP
standard and the time that it takes to do so depends on the refinery's
structure, operations, and the mix of crude oil types that it
processes.\42\
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\42\ Further discussion of the changes we expect from refineries
associated with removal of the 1-psi waiver is available in the TSD.
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In addition to contributing to gasoline's volatility, butane also
contributes to gasoline's octane and volume. Thus, when removing
butane, refineries must also make other changes to replace the lost
octane to keep the gasoline consistent and in compliance with EPA
regulations and industry specifications. Refineries could produce more
alkylate or reformate, which are two high octane gasoline blendstocks,
to make up the lost octane. We estimate that the amount of butane that
would have to be removed to produce a gasoline 1-psi lower in RVP
amounts to about two volume percent of the volume of gasoline. However,
comments from the refining industry described how at least some
refineries would need to not only remove butane, but some less-volatile
hydrocarbons as well (e.g., light straight run naphtha (LSR) or NGLs).
Since LSR and NGLs are less volatile than butane, refineries would need
to remove significantly more of those hydrocarbons to realize the same
1-psi reduction in RVP, perhaps up to 10 volume percent. Such a change
would have a smaller reduction in octane, however. Removing butane and
these other light hydrocarbons from the summer gasoline sold in the
petitioning States would reduce the supply of gasoline in those States.
Regardless of how a refinery is modified to reduce the RVP of its
gasoline, it will result in additional output of the removed butane or
other light hydrocarbons. If excess onsite butane storage capacity is
available, the refinery has the option of saving excess butane on-site
for use in winter gasoline production, which would minimize the cost
impact of producing low-RVP CBOB. However, if excess butane storage is
not available, the refinery would then need to store it offsite (e.g.,
in caverns), sell it, or export it. This may require additional butane
railcars and refinery upgrades for handling railcars to transport the
butane. Refineries may also utilize some portion of the butane as a
feedstock to their alkylation unit. In the near term, the large influx
of excess butane may exceed the existing storage capacity, transport
capacity, amount desired in the markets, or alkylation unit capacity.
Without an outlet for the excess butane, this could then limit the
refinery's ability to produce low-RVP CBOB, further reducing the supply
of low-RVP gasoline. If a refinery is removing LSR or NGLs from its
gasoline, these gasoline blendstocks could be sold to another refinery
that could blend them into its gasoline, but the purchasing refinery
would then need to remove butane to compensate for the RVP impact of
the LSR or NGLs. This gasoline blendstock switching would help to
offset the volume reductions associated with producing low-RVP CBOB.
Given the high demand for gasoline in the summer months, refineries
often begin producing summer gasoline for storage well ahead of the
upcoming high ozone season. This process can begin as early as December
of the year prior to the applicable high ozone season, and thus storage
of a differing volatility of fuel could impact the refinery's ability
to utilize the fuel the next summer without further modification.
B. Distribution
As discussed above, removal of the 1-psi waiver will require
refineries that distribute gasoline to the petitioning States to
produce low-RVP CBOB. There are three primary groups within the
distribution chain that will be impacted: refineries, pipelines (with
their breakout terminals), and downstream product terminals.
1. Refinery Distribution
Most refineries have an onsite terminal with numerous product
storage tanks wherein they accumulate and store the range of products
that they produce prior to placing the products into the distribution
system. Once a refinery accumulates a sufficient volume of a gasoline
type and confirms that it meets the applicable gasoline specifications,
the refinery then schedules the shipment of that batch of gasoline to
downstream markets. Shipment can occur via an onsite product terminal
analogous to that discussed in Section V.B.3 where trucks load product
and deliver to retail outlets. However, most gasoline produced by
refineries is loaded onto product pipelines for delivery to downstream
product terminals. In some cases, refineries also distribute product by
rail or barge. For those refineries that distribute most or all of
their gasoline to the petitioning States, removal of the 1-psi waiver
will have little impact on their distribution operations. They can
switch over their existing product tanks to hold only low-RVP CBOB.
Instead of transitioning from winter CBOB RVP levels (up to 15 psi) to
a 9.0 psi RVP CBOB in the summer, they would instead transition to low-
RVP CBOB. However, refineries that produce gasoline for both
petitioning and non-petitioning States will likely need additional
tanks, pipes, manifolds, and control systems to store the additional
grades of gasoline. The time needed to plan, design, permit, and
construct additional tankage is typically on the order of two or more
years. Until this can be accomplished, a refinery that lacks the
additional tankage will likely need to shift all its production to low-
RVP CBOB. However, this can be avoided if unused systems already exist
or other products are discontinued.\43\ The market may go through a
``sorting out'' process, wherein some refineries shift their historic
markets, with some changing to producing only low-RVP CBOB and others
continuing to produce only 9.0 psi RVP CBOB. This could result in some
low-RVP CBOB flowing in from outside the petitioning States (e.g., from
Gulf Coast refineries). Due to tankage and logistical limitations, some
refineries serving both markets may initially shift all their
production to low-RVP CBOB. This would result in low-RVP CBOB being
distributed to the surrounding States, which would ease gasoline supply
availability concerns,
[[Page 14767]]
but at the same time add to the overall reduction of gasoline supply
due to butane and other light hydrocarbon removal. Terminals servicing
low-RVP CBOB outside the petitioning States that have butane blending
facilities could purchase some of the excess butane being removed by
refineries and inject it into their CBOB to bring the fuel up to 9.0
psi RVP since the gasoline in their area would not require the low-RVP
fuel.
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\43\ Alternatively, some refineries may shift all premium grade
fuel to low-RVP CBOB, while producing both 9.0 psi and low-RVP CBOBs
for regular grade fuel.
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For those refineries that have excess tankage or invest in new
tankage to allow the production of both 9.0 psi and low-RVP CBOB, they
would also need to adjust their operations and schedules for loading
gasoline blendstock onto pipelines, barges, or rail to split their
production into separate product streams. These logistical changes
would initially take some period of time in order to occur smoothly and
safely, but should streamline over time.
2. Pipelines and Pipeline Breakout Terminals
Most fuel in the U.S. flows from refineries to consumer markets via
pipeline systems. As described in the TSD, there are several pipeline
systems serving the petitioning States, the vast majority of which
serve both petitioning and non-petitioning States. Consequently, the
addition of the low-RVP CBOB in the petitioning States will require
significant changes in the operations of the pipeline systems. What is
currently one large conventional fuel market distributing primarily 9.0
psi RVP CBOB will also need to distribute the new low-RVP CBOB. There
will thus be a period where the pipeline systems go through a planning
and optimization process to assess what gasoline type must be supplied
to the pipeline to comply with the new fuel requirement. If a pipeline
primarily serving the petitioning States is only equipped with breakout
tanks compatible with a single gasoline type, the pipeline company will
likely mandate that refiners solely provide that gasoline type.
Decisions from refineries on whether they will supply low-RVP CBOB, and
at what volumes, will be necessary to inform the planning and
optimization process by pipeline systems. All of this can have impacts
on gasoline supply not only to the petitioning States, but also to the
surrounding States in the short term. Having the wrong fuel types in
the wrong volume can result in an inability for the pipeline to move
fuel in and out of tankage as needed, which, in turn, can result in
significant supply disruption not only for the gasoline type in
question, but also for all the fuels shipped on the pipeline. For the
longer term, due to the market splitting into different types, some
areas in the petitioning States may lose access to available markets of
supply, which may then lead to more frequent shortfalls in supply
during times of disruption (e.g., refinery fire, pipeline outage,
hurricane, etc.).
Some pipeline companies operate a fungible distribution system.
This allows them to collect a standard type of gasoline from refineries
into their system, ``transport'' the barrels virtually, and draw out
identical barrels at their destination. The barrels delivered are not
actually the purchased barrels from the refinery, but rather the same
product from a different refinery meeting the same product
specifications. An additional type of gasoline would disrupt their
ability to function as efficiently using the fungible system. This
increases the complexity associated with ensuring products can be
distributed to locations in the timeframe needed to ensure supply to
the market.
The most significant impact on pipeline operations caused by the
removal of the 1-psi waiver, however, will be on pipeline breakout
tankage operations. Breakout tankage is required at junctions where
pipelines connect with other pipelines that have differing schedules
and flow rates. Thus, the pipelines typically need tankage to store
every grade and type of product distributed on the pipeline, with the
size and configuration of the tankage matched to the product and
pipeline batch sizes. If new regular and premium grades of low-RVP CBOB
need to be shipped on the pipeline, then it may require the addition of
new tankage at these breakout tank facilities. The planning,
permitting, and construction of such additional tankage would require
two or more years and is likely to be an issue at many breakout tankage
facilities both inside and outside the petitioning States. Until this
additional breakout tankage can be brought into service, an impacted
pipeline serving the petitioning States may be restricted to solely
distributing either 9.0 psi or low-RVP CBOB, limiting gasoline supply
to either the petitioning States or the surrounding States, and in turn
restricting what the refineries shipping on the pipeline are able to
produce if the pipeline restrictions do not allow for the distribution
of a particular type of gasoline. Some pipelines may opt to carry one
fuel type and some the other, limiting the product offerings at the
various downstream product terminals. As with the refineries, it may be
that due to tankage and logistical limitations, pipelines currently
serving both petitioning and non-petitioning States will have to
initially shift all the gasoline they carry to low-RVP CBOB, which is
fungible in both markets. This will result in low-RVP CBOB being
supplied in the surrounding States and additional reduction in supply
of gasoline due to the necessary removal of butane and other light
hydrocarbons. Pipelines would have the option to blend in butane during
gasoline transport to the States with the 1-psi waiver that are located
at the end of the pipeline systems (e.g., North Dakota and Michigan).
This would provide a market for some of the excess butane from
refineries producing low-RVP CBOB and could reduce consumer costs in
the border States by blending up to 9.0 psi RVP CBOB. It could also
allow more low-RVP CBOB to be produced if there are constraints in the
markets for butane. However, like refineries, many pipeline and
terminal facilities do not currently have the existing infrastructure
to utilize butane blending. Additional tankage and equipment may be
needed to maximize the potential of this opportunity.
3. Product Terminals
The potential impact of the removal of the 1-psi waiver on product
terminals varies depending on whether the terminals provide gasoline
only to the petitioning States, or to non-petitioning States as well.
Those terminals that only provide gasoline to the petitioning States
will be little impacted, as they will simply take delivery of
replacement grades of low-RVP CBOB beginning in the spring leading into
the summer season. They will not have to contend with adding additional
fuel grades and types and the tankage and logistics associated with
them. This will most likely not be the case for terminals that serve
areas both within and outside the petitioning States. If such terminals
do not have sufficient onsite tankage capacity to handle the additional
regular and premium grades of low-RVP CBOB, then they will need to
either add the tankage or choose to serve one market or the other. The
decision to serve a particular market or fuel type may also be dictated
by a fuel marketer on the retail side. Both options could have gasoline
supply, cost, and price impacts both within the petitioning States and
in the surrounding areas the terminals serve. Approximately 75 such
terminals are located close to the borders (i.e., 30 miles) between
petitioning States and
[[Page 14768]]
non-petitioning States.\44\ These terminals are more likely to provide
gasoline to both petitioning and non-petitioning States and will need
to change their gasoline distribution patterns if they lack extra
tankage to handle the additional low-RVP CBOB grades. Since terminals
can serve gasoline markets up to 200 miles away, the number of
terminals impacted could be significantly greater. If limitations in
the fuel distribution system cause low-RVP CBOB to be sold in a
significant portion of the surrounding States to improve fungibility of
gasoline near the petitioning States, the potential impact on terminals
will be reduced.
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\44\ EIA, U.S. Energy Atlas--Oil and Natural Gas Maps, https://www.eia.gov/maps.
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Regardless of whether a terminal serves only the petitioning
States, or also non-petitioning States, all terminals will be impacted
to some degree by a somewhat more challenging transition in the spring
from winter to summer fuel due to the removal of the 1-psi waiver,
particularly in the first year. While this transition occurs every year
as the terminals blend down the volatility of the CBOB they have in
storage from the higher RVP of winter CBOB to the lower RVP of summer
CBOB, the change of having to blend down an additional 1.0 psi to
accommodate low-RVP CBOB instead of 9.0 psi RVP CBOB will require some
additional time and incur additional cost. In order to achieve the
volatility of low-RVP CBOB, pipelines and terminals will likely need to
blend down their winter CBOB with a summer CBOB that has an RVP as low
as 6.0 psi during this transition period. Additionally, terminals will
likely take steps to ensure their tanks are drained as low as possible
prior to receiving a low-RVP CBOB to ensure the finished gasoline will
comply with the 9.0 psi RVP standard, which could result in additional
delays before the low-RVP CBOB begins moving to markets. This will
likely occur more frequently at terminals located within and near the
border of the petitioning States.
4. Tank Trucks
Moving gasoline to market also involves tank trucks that deliver
the gasoline to retail outlets. For terminals located within the
petitioning States, their operations should be little impacted by the
removal of the 1-psi waiver; they will simply pick up a different type
of gasoline from the product terminal than they did before and can
transport it to market, even outside the petitioning States if the
terminal normally covers the area. However, depending on the changes in
product offering at the terminals, there may still be considerable
stress on their operations. If some refineries, pipelines, or terminals
limit their product offering to either 9.0 psi or low-RVP CBOB,
especially in the near term, then the tank trucks would need to shift
their operations accordingly. In some cases where there is a loss of
fuel fungibility, this is expected to increase the distances traveled,
which may in turn require the purchase of additional tank trucks and
hiring of additional drivers. As with the rest of the fuel distribution
system, this can all be accomplished, but will take some time for the
market to respond and optimize around the new norms.
C. Retail Operations
The removal of the 1-psi waiver and resulting transition from 10.0
psi RVP gasoline to 9.0 psi RVP gasoline received from the terminal
should be minor for retail outlets--they will simply take delivery of
the lower-volatility gasoline from the terminal. The most noticeable
effects will be seen at retail outlets near the borders of States
maintaining the 1-psi waiver, as the cost of 9.0 psi RVP gasoline
within the petitioning States is likely to be higher than that of 10.0
psi RVP gasoline across the border in non-petitioning States. Retailers
within the petitioning States may have to charge higher prices to
recoup this cost, which could result in consumers preferentially
choosing to refill at stations across the border when possible.\45\
Retail operations located near State lines on the border of petitioning
and non-petitioning States may have issues scheduling gasoline
shipments to their retail outlets if tank trucks are shipping their
gasoline from terminals located further away and if there is an initial
shortage of tank truck operators, particularly at the beginning of the
transition to the new 9.0 psi RVP gasoline. As with the rest of the
distribution system, this can all be accomplished, but will take some
time for the market to respond and optimize around the new norms.
---------------------------------------------------------------------------
\45\ This phenomenon is observed today in SIP and RFG areas.
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VI. Implementation and Effective Date
A. Statutory Provisions
Under CAA section 211(h)(5)(C), the regulations removing the 1-psi
waiver shall take effect on the later of: (1) The first day of the
first high ozone season for the area that begins after the date of
receipt of the notification; or (2) 1 year after the date of receipt of
the notification. The high ozone season is defined in EPA's regulations
as ``June 1 through September 15 for retailers and [wholesale purchaser
consumers (WPCs)], and May 1 through September 15 for all other
persons,'' which includes gasoline distribution terminals.\46\
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\46\ 40 CFR 1090.80. We note that given the current definition
of ``high ozone season,'' the later date will always be one year
after receipt of the request from a Governor.
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In applying this provision for the petition dated April 28, 2022,
the later date is April 28, 2023. Therefore, the earliest date on which
the removal of the 1-psi waiver for Illinois, Iowa, Nebraska,
Minnesota, South Dakota, and Wisconsin could have been effective was
April 28, 2023. This date would have been in advance of the high ozone
season beginning May 1, 2023. For the petition from Ohio, dated June
10, 2022, the later date is June 10, 2023. This would have placed the
effective date within the 2023 high ozone season (i.e., 10 days after
the beginning of the high ozone season for retailers and WPCs, and 41
days after the beginning of the high ozone season for all other
parties). Finally, for the petition from Missouri, dated December 21,
2022, the later date is December 21, 2023.\47\ This would have placed
the effective date after the 2023 high ozone season.
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\47\ We recognize that the Missouri petition requested that the
removal take effect for the 2023 high ozone season. However, such an
effective date was not permissible under CAA section 211(h)(5)(C).
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Further, under CAA section 211(h)(5)(C), the effective date can be
extended if EPA, on its own motion or on petition from any person,
after consultation with the Secretary of Energy, determines there would
be an insufficient supply of gasoline in a State that has requested the
removal of the 1-psi waiver for E10.\48\ Section 211(h)(5)(C) further
provides that the effective date can be extended for not more than one
year, and that EPA may renew the extension for two additional periods,
each of which shall not exceed one year.
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\48\ CAA section 211(h)(5)(C)(ii).
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As described above, EPA is allowed to extend the effective date of
the removal of the 1-psi waiver upon a finding of ``insufficient supply
of gasoline in the [petitioning] state'' that would result from ``the
promulgation of the regulations [to remove the 1-psi waiver].'' \49\
``Insufficient supply of gasoline'' is not defined in the statute, and
thus EPA is interpreting and applying the phrase in a manner that is
consistent with the structure of the statute, historical application of
similar
[[Page 14769]]
or related provisions, and congressional intent. We interpret
``insufficient supply of gasoline'' to require a demonstration that
gasoline supply disruptions would result from removal of the 1-psi
waiver, such that the necessary quantities of gasoline may not be
available in the States at the time they are required. It is
particularly appropriate in this case to consider the possibility of
supply disruptions because this action calls for a different type of
gasoline to be physically produced and transported to and within the
petitioning States. CAA section 211(h)(5) also indicates that our
analysis of ``insufficient supply'' should be ``in the State''
petitioning for the removal of the 1-psi waiver. That is, if there was
insufficient supply only in a single State, we could extend the
effective date for that State only. This contrasts with CAA section
211(c)(4)(C)(iii)(I), which calls for consideration of supply
constraints in ``the smallest geographic area.'' Therefore, our
analysis properly considers any state-specific factors, and examines
the supply in the State.
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\49\ CAA section 211(h)(5)(C).
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In considering the likelihood of supply disruptions, we look to the
entire production and distribution chain, from the refineries where
gasoline is produced, through distribution systems such as pipelines
and trucking, and ultimately to the retail outlets. This reading is
also similar to EPA's interpretation of other provisions in CAA section
211 that call for consideration of constraints on fuel supply when EPA
is acting on petitions within the fuels program. For instance, CAA
section 211(k)(6)(A)(ii) allows EPA, after consultation with the
Department of Energy, to extend the effective date for a State that has
petitioned to opt into the RFG program for a period that is up to one
year from the date of receipt of the petition upon a finding of
insufficient domestic capacity to produce RFG. A related provision in
CAA section 211(k)(6)(B)(iii) allows EPA to extend the effective date
for areas within the ozone transport region established under CAA
section 184 that opt into RFG, upon a finding of insufficient capacity
to supply RFG. Like the phrase ``insufficient supply of gasoline'' in
CAA section 211(h)(5)(C), the statute does not define either
``insufficient domestic capacity'' or ``insufficient capacity to supply
RFG.'' But in acting on petitions to opt into the RFG program, EPA has
explained that setting the effective date allows EPA to consider any
sudden and unexpected increases in the demand for RFG on the local
supply and distribution system that is caused by an opt-in.\50\
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\50\ 62 FR 30261, 30263 (June 3, 1997) (``Section 211(k)(6)(A)
of the Act gives the Administrator discretion to `establish an
effective date * * * as he deems appropriate* * *.' EPA interprets
this provision to mean that it has broad discretion to consider any
factors reasonably relevant to the timing of the effective date.
This would include factors that affect industry and the potential
opt-in area. The factors that affect industry could include
productive capacity and capability, other markets for RFG, oxygenate
supply, cost, lead time, supply logistics for the area, potential
price spikes, and potential disruption to business.'')
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EPA's reading of ``adequate supply'' in CAA section
211(c)(4)(C)(ii) comports with our interpretation of CAA section
211(h)(5)(C) given that Congress intended for EPA to act in certain
unique emergency circumstances to relieve supply disruptions within the
``motor fuel distribution system.'' \51\ And while ``motor fuel
distribution system'' is not defined in the statute, EPA's historical
practice in granting waivers under CAA section 211(c)(4)(C)(ii) has
been to consider all stages of the gasoline production and distribution
system within States that are experiencing emergency circumstances.
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\51\ CAA section 211(c)(4)(C)(iii)(V).
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In contrast, the phrase ``insufficient supply of gasoline'' differs
from other sub-provisions of CAA section 211 allowing for waivers of
applicable requirements as well as implementation delays that use
language such as ``inadequate domestic supply.'' \52\ The D.C. Circuit
has provided guidance on the meaning of ``inadequate domestic supply''
in CAA section 211(o)(7)(A)(ii), finding that EPA may properly consider
``supply side factors--such as production and import capacity,'' but
not downstream effects.\53\ The court, in viewing the statutory scheme
of the RFS program, further specified that the supply of renewable fuel
to refiners, blenders, and importers properly considers the factors
necessary to get renewable fuel to refiners, blenders, and importers,
but not to market actors ``downstream from refiners, importers, and
blenders.'' We find that the analysis under CAA section 211(h)(5)
extends to include market actors downstream from refiners, importers,
and blenders, as the gasoline distribution system is a key component to
the availability of gasoline in the State.\54\ The analysis properly
considers production factors, as well as the distribution of fuel from
the refinery, through the distribution chain (including pipelines and
terminals) to the ultimate endpoint of the gasoline distribution
chain--the retail outlet. Further, CAA section 211(h)(5) explicitly
contemplates the ``supply of gasoline in the State.''
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\52\ CAA sections 211(m)(3)(C) and (o)(7)(A)(ii).
\53\ Americans for Clean Energy v. EPA, 864 F.3d 691, 710
(2017).
\54\ CAA section 211(h)(5)(C) explicitly contemplates the
``supply of gasoline in the State.''
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Finally, we note that consideration of the effective date for this
action properly considers supply to the ultimate consumer given the
statutory language ``in the State.'' Therefore, our analysis of
``insufficient supply of gasoline'' properly considers all stages of
the gasoline production and distribution system, from the refinery to
the retail outlet.
B. Finding of Insufficient Supply for 2024 and Renewal of Extension of
Effective Date
CAA section 211(h)(5)(C)(ii)(I) requires a determination of
insufficient supply of gasoline in order to extend the effective date
of the removal of the 1-psi waiver. We determined that a 2023
implementation date would result in insufficient supply of gasoline and
proposed an effective date of April 28, 2024, for removal of the 1-psi
waiver in all petitioning States.\55\ We also sought comment on
renewing the extension of the effective date for removal of the 1-psi
waiver for an additional year (i.e., until the summer of 2025).\56\ We
received comments for and against the proposed effective date.
Commenters against the proposed dates argued that we could still
implement the rule for the 2023 summer season, despite the mere two
weeks between the end of the comment period and the beginning of the
2023 summer season for terminals and refiners. Commenters in support of
the proposed delay argued that a 2023 effective date would be either
``impractical'' or ``impossible.''
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\55\ At proposal, we further explained that the effective date
for Ohio, would have been within the 2023 high ozone season (i.e.,
10 days after the beginning of the high ozone season for retailers
and WPCs, and 41 days after the beginning of the high ozone season
for all other parties), while the effective date for Missouri would
have been December 21, 2023, or after the 2023 high ozone season. 88
FR 13762 (March 6, 2023).
\56\ 88 FR 13767 (March 6, 2023).
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Further, in response to and after the proposal, we received
petitions from numerous stakeholders requesting a delay of the proposed
effective date until either 2025 or 2026. These stakeholders posited
that the extension of the effective date would be supported by the
Administrator's finding of insufficient supply of gasoline pursuant to
CAA section 211(h)(5)(C)(ii)(I).\57\
[[Page 14770]]
After consideration of comments and extension petitions, EPA is acting
on its own motion to renew the extension of the proposed effective date
for an additional year from April 28, 2024, to April 28, 2025. In sum,
the circumstances that justified a finding of insufficient supply of
gasoline and extension of the effective date for 2023 have not
attenuated. Additionally, we have consulted with the Department of
Energy, consistent with the CAA section 211(h)(5)(C)(ii)(I). We are not
acting on petitions that requested a 2026 effective date, and these
petitions remain pending. In this section we discuss our finding that
there would be an insufficient supply of gasoline in 2024.
---------------------------------------------------------------------------
\57\ Petition from Magellan (September 16, 2022); Petition from
API (September 23, 2022); Petition from Flint Hills Resources
(September 29, 2022); Petition from Phillips 66 (September 29,
2022); Petition from AFPM and other parties (October 14, 2022);
Petition from HF Sinclair (October 17, 2022); Petition from Magellan
(August 19, 2023); Petition from Kevin Stitt, Governor of Oklahoma
(August 25, 2023); Petition from API (September 29, 2023); Petition
from AFPM (September 29, 2023); Petition from Sarah Huckabee
Sanders, Governor of Arkansas (October 9, 2023); Petition from
Superior Refining (October 13, 2023); Petition from Phillips 66
(October 18, 2023); Petition from CountryMark (October 25, 2023);
Petition from Yesway (November 1, 2023); Petition from HF Sinclair
(November 15, 2023).
---------------------------------------------------------------------------
At proposal, we provided the rationale for our determination of
insufficient supply for 2023; we assessed the following three supply
constraints: (1) Low gasoline inventories; (2) The limited time
available for coordination between various parties to make the
necessary physical changes to the gasoline production and distribution
infrastructure; and (3) The physical loss of supply necessary to
produce low-RVP CBOB. We determined that these constraints would likely
have led to supply disruptions in the petitioning States in 2023.\58\
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\58\ Our detailed finding of insufficient supply for 2023 can be
found at 88 FR 13767 (March 6, 2023).
---------------------------------------------------------------------------
We have now assessed gasoline supply impacts associated with an
effective date in 2024 and updated our analyses of these supply
constraints.\59\ As discussed further in detail below and in the TSD,
our updated analyses found: (1) Continued low gasoline inventories in
PADD 2; (2) The limited time available after the promulgation of this
action for coordination between various parties to make the necessary
physical changes to the gasoline production and distribution
infrastructure; and (3) Greater reduction in supply as a result of the
removal of the 1-psi waiver than estimated at the time of the proposal.
We also considered the following: (1) The lack of sufficient time to
make the capital investments and physical changes to refineries and the
fuel distribution system; and (2) Less flexibility within the fuel
distribution system than had been anticipated to adequately mitigate
the supply reduction until such time as the capital and physical
changes can be made. We are therefore renewing the extension of the
delay of the effective date for an additional year to April 28, 2025.
---------------------------------------------------------------------------
\59\ EPA also received several petitions for further delay
beyond 2024. See Petition from Magellan (August 25, 2023); Petition
from Kevin Stitt, Governor of Oklahoma (August 25, 2023); Petition
from API (September 29, 2023); Petition from AFPM (September 29,
2023); Petition from Sarah Huckabee Sanders, Governor of Arkansas
(October 9, 2023); Petition from Superior Refining (October 13,
2023); Petition from Phillips 66 (October 18, 2023); Petition from
CountryMark (October 25, 2023); Petition from Yesway (November 1,
2023); Petition from HF Sinclair (November 15, 2023).
---------------------------------------------------------------------------
Since proposal, we have conducted an updated analysis to quantify
the reduction in gasoline supply that would result from the removal of
the 1-psi waiver. At proposal, we estimated the reduction in supply as
20 thousand barrels per day (kbpd) based on the removal of light
hydrocarbons--mostly butane--to reduce the volatility of CBOB.\60\ In
response to our proposal, AFPM commissioned a study of supply
reductions that quantified the reduction in gasoline supply at 88-120
kbpd.\61\ We also conducted a series of meetings with refiners
regarding the supply impacts associated with the removal of the 1-psi
waiver in the petitioning States.\62\ As further described in the TSD,
based on our discussions with refiners and our review of the comments,
we now estimate that gasoline production by refineries supplying
gasoline to the petitioning States would likely decrease by 30-80 kbpd
as a result of the transition to low-RVP CBOB. Our estimate increased
from the proposal primarily because a significant number of refineries
that choose to produce low-RVP CBOB will need to reduce other less-
volatile hydrocarbons (e.g., NGLs), which will have a larger impact on
gasoline supply. On average, refineries producing low-RVP CBOB are
estimated to produce 3-4 percent less gasoline compared to producing
9.0 psi RVP CBOB, particularly when removal of the 1-psi waiver is
first implemented. We acknowledge that the possibility of drawing down
gasoline inventories, increasing gasoline supply from other regions
(e.g., Gulf Coast), and reblending some higher-volatility gasoline
blendstocks at terminals in non-petitioning States could mitigate the
supply reduction to some extent. However, we believe that these
mitigating actions would fall far short of offsetting the projected
supply reductions for the 2024 summer season.
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\60\ ``Technical Support Document for the Proposed Removal of
the 1-psi Waiver,'' available in the docket for this action.
\61\ Baker and O'Brien, ``Midwest States Gasoline RVP--1 psi
Waiver Study, Report for American Fuel and Petrochemical
Manufacturers,'' February 24, 2023. Submitted as part of comments
from AFPM, Docket Item No. EPA-HQ-OAR-2022-0513-0077.
\62\ Memorandum to the Docket: Meeting Log for Requests from
States to Remove the Gasoline Volatility Waiver.
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Further, at proposal we noted that while the gasoline inventories
in PADD 2 (the affected region) was low, we believed that it would
likely return closer to historic levels due to the previously shut-down
Midwest refineries returning to operation. However, even though these
refineries have since come back online--increasing gasoline production
in the region--the gasoline inventories in PADD 2 \63\ have continued
to be at levels of concern.\64\ Furthermore, we have been made aware of
the fact that refiners have had a heavy maintenance season at their
refineries in the fall of 2023 and are planning a heavy maintenance
season for the first quarter of 2024. This means that gasoline
production capacity will be taken offline for several months at a key
time during the winter season when gasoline inventories are typically
replenished prior to the next summer season.\65\ Additionally, gasoline
demand is still expected to increase. EIA estimates that national
gasoline demand will increase by 60 kbpd in 2024 compared to 2023,
further straining gasoline inventories and supply.\66\ Thus, we
anticipate that gasoline inventories in PADD 2 will not recover
sufficiently by the 2024 summer season to alleviate the estimated loss
of gasoline supply that would occur when low-RVP CBOB is produced.
Further, due to a separate and unrelated regulatory action, the
prohibition on sale of conventional gasoline in the Denver metropolitan
area began on November 7, 2023. This means that
[[Page 14771]]
gasoline sold in that area must comply with a 7.4 psi RVP requirement
beginning with the 2024 summer season.\67\ This is expected to cause an
additional 5-10 kbpd reduction in gasoline supply in the same 2024
summer season. Although Denver is not in a petitioning State, some
gasoline is currently supplied to this region from refineries that also
produce gasoline for the petitioning States, resulting in additional
strain on gasoline supply in the region.
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\63\ Low gasoline inventories in PADD 2 were an additional bases
for the emergency fuel waivers issued under CAA section
211(c)(4)(C)(ii)(I) during the summer of 2023. See Letter from EPA
Administrator to Governors, ``May 1, 2023, E15 Reid Vapor Pressure
Fuel Waiver,'' April 28, 2023 (``The Midwest region--the region that
has the most ability to increase supply with blending an increased
percentage of ethanol--has gasoline stocks below the five-year
seasonal average for this time of year.'').
\64\ Based on our discussions with EIA, gasoline supply begins
to be a concern when gasoline inventories drop below the 5-year
minimum for any particular PADD.
\65\ Bloomberg News, ``Nearly 2.5 Million Barrels a Day of US
Refining Capacity to Shut for Fall Maintenance,'' October 2, 2023,
https://www.bnnbloomberg.ca/nearly-2-5-million-barrels-a-day-of-us-refining-capacity-to-shut-for-fall-maintenance-1.1979186.
\66\ EIA, Annual Energy Outlook (AEO) 2023, Table 11, https://www.eia.gov/outlooks/aeo. AEO 2023 also estimates that gasoline
demand will decrease by 140 kbpd in 2025 relative to 2024.
\67\ 87 FR 60926, 60932-33 (October 7, 2022).
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As also described in Section V and the TSD, capital investments
will be necessary for some refiners and fuel distributors to
accommodate a transition to low-RVP CBOB in the petitioning States.
This includes investments for the storage of additional gasoline types
and grades, storage of excess butane and LSR, and associated measures
for piping, pumping, and spill containment. We also anticipate that
refineries would need to debottleneck debutanizers and octane-producing
units to enable the production of low-RVP CBOB.\68\ These capital
investments typically require time to come online. For example,
projects to debottleneck existing refinery units typically require 2-
2.5 years to engineer, design, purchase, permit and install. Under an
assumption that refiners and fuel distributors could have begun the
planning process for debottlenecking a refinery unit or installing a
gasoline storage tank after the first State filed its petition in April
2022, or after EPA proposed to remove the 1-psi waiver in the
petitioning States in early 2023, there would be insufficient time
prior to the summer of 2024 to complete the desired capital additions.
However, based on discussions with refiners, pipeline operators, and
terminal operators, as well as public comments, many of the needed
capital investments were not initiated in 2022 due in part to: (1) The
uncertainty created by several States rescinding their petitions during
2022; (2) The emergency fuel waivers under CAA section
211(c)(4)(C)(ii)(I) extending the 1-psi RVP waiver to E15 during the
2023 summer season; \69\ and (3) Potential congressional action that
would extend the 1-psi waiver to E15 nationwide.\70\ Without initiation
in 2022, many of the necessary capital investments are unlikely to be
completed by the summer of 2024.
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\68\ Capital grassroots projects typically require 3-4 years to
engineer, design, purchase, permit and install. Smaller projects
that can ``debottleneck'' individual refinery units (e.g., replacing
a furnace, heat exchanger, or reactor) typically require 2-2.5 years
to complete, while much smaller projects (e.g., replacing a valve or
pump or adding or increasing the size of piping) may be designed and
completed in a year or less. These types of capital investments can
help a refinery produce additional low-RVP CBOB. Shell, ``Thriving
in the new reality: Refinery revamp projects FAQ; Shell Catalysts
and Technologies,'' https://www.shell.com/business-customers/catalysts-technologies/resources-library/refinery-revamp-faq.html.
\69\ From April 28, 2023, to August 28, 2023, EPA issued a
waiver under CAA section 211(c)(4)(C)(ii)(I) that facilitated E15
sales during the summer of 2023.
\70\ See, e.g., comments from Magellan (Docket Item No. EPA-HQ-
OAR-2022-0513-0042), API (Docket Item No. EPA-HQ-OAR-2022-0513-
0056), and HF Sinclair (Docket Item No. EPA-HQ-OAR-2022-0513-0076).
---------------------------------------------------------------------------
In addition, supplying the new low-RVP CBOB will require
coordinated investments, planning, and actions between refineries,
pipelines and other fuel distribution companies, terminals, and retail
outlets. Typically, this coordination occurs before winter to provide
the fuel production and distribution system a chance to make the proper
preparations; we are now past the point in the calendar when such
coordination typically occurs. We are also entering into the timeframe
when most refineries have already started producing summer gasoline. As
such, refineries will not have sufficient and appropriate notice to
begin modifying their fuel supply for the summer of 2024.
Finally, we assumed at proposal that flexibility within the fuel
production and distribution system could allow refiners and fuel
distributors to mitigate the projected 2024 summer season supply
reduction until such time as capital and physical changes could be
completed. However, based on subsequent comment and analysis, we now
believe that the existing flexibility would not be sufficient,
particularly in light of the larger anticipated supply reduction and
lingering low gasoline inventories in PADD 2.
For the above-mentioned reasons, supported by additional detail and
analysis in the TSD, we are making a determination that there will be
an insufficient supply of gasoline in the petitioning States in the
2024 summer season and, therefore, are renewing the extension of the
effective date of the removal of the 1-psi waiver by an additional year
to April 28, 2025.\71\
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\71\ Discussion of the supply circumstances in the summer of
2025 is available in TSD Section 7.
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VII. Cost and Price Impacts
There are associated costs with the changes to the refining and
gasoline distribution systems described in Sections V and VI. Part of
the costs will be incurred by the refining sector, while another
portion will be incurred by the gasoline distribution system. Gasoline
refining costs will increase due to several factors, the largest
portion of which is the lost opportunity cost for refiners having to
sell the removed light hydrocarbon material at lower market prices
instead of blending this material into high value summer gasoline. To
the extent that refiners and distributers install capital equipment,
there are also additional capital and associated operating costs that
will need to be recouped over time. These costs will be passed along to
consumers in the petitioning and surrounding States in the form of
higher gasoline prices.
With respect to consumer fuel prices, while fuel prices generally
reflect fuel costs in the competitive gasoline market, this may not be
the case when removal of the 1-psi waiver is first implemented, as
gasoline supply will be reduced and not yet recovered. Due to the
reduced supply, there will likely be a reduction in PADD 2 gasoline
inventories, which could further increase gasoline prices. Due to the
challenges that some refiners may have in producing low-RVP CBOB and
the associated impacts on gasoline inventories, fuel prices will likely
exceed fuel costs because the marginal cost producer will set the fuel
price. This will likely affect gasoline prices in both petitioning and
non-petitioning States and result in higher gasoline prices at the pump
for consumers. The potential cost and price impacts due to the removal
of the 1-psi waiver are discussed in more detail in the TSD.
As discussed above, under the relevant CAA provisions, upon
receiving a petition from a State Governor that is accompanied by a
successful demonstration of emissions increases as a result of the 1-
psi waiver, EPA is required to remove the 1-psi waiver in the areas
requested by the Governor. In deciding whether to grant the petition,
the statute does not provide EPA with the authority to consider fuel
cost or price impacts and we assume that any fuel cost or price impacts
to consumers were taken into consideration by the Governors of the
petitioning States in submitting their petitions. Therefore, regardless
of the magnitude of the impact of this action on fuel costs or prices,
EPA has not considered them in this action.
VIII. Associated Regulatory Provisions
In the NPRM, we proposed changes to the fuel quality regulations at
40 CFR part 1090 to implement the removal of the 1-psi waiver in the
petitioning States. Specifically, we proposed to include new
designation and associated product transfer document (PTD) language
requirements and a regulatory
[[Page 14772]]
mechanism for States to request the reinstatement of the 1-psi waiver
under CAA section 211(h)(5). We are finalizing these changes as
proposed, and we respond to comments received on the proposed
regulatory changes in the RTC document.
A. New Designation and Associated PTD Language
We are finalizing as proposed a new designation and associated PTD
language for summer CBOB in States where the 1-psi waiver for E10 has
been removed under CAA section 211(h)(5).\72\ Designations and PTD
language requirements help ensure that batches of fuel are distributed
and used in a manner consistent with EPA's fuel quality requirements.
Without proper designation, summer gasolines with different
volatilities intended for use in different areas may get commingled in
a fungible system, causing the introduction and use of non-compliant
gasoline in areas that require lower-volatility fuels in the summer.
Similarly, PTD language serves to ensure that parties in the fuel
distribution chain are aware of the designation of the fuel and
accompanying Federal requirements for the distribution and use of the
fuel. Because we are finalizing requirements for a new type of summer
CBOB in this action, we need to create a new designation and
accompanying PTD language to ensure that the new CBOB is distributed
and used consistent with the RVP requirements.
---------------------------------------------------------------------------
\72\ The designation and PTD language requirements for gasoline
are located at 40 CFR 1090.1010 and 1090.1110, respectively.
---------------------------------------------------------------------------
In this action, we are requiring gasoline manufacturers to
designate summer CBOB for use in States where we have removed the 1-psi
waiver as ``Low-RVP Summer CBOB.'' We are also finalizing as proposed
related changes to the PTD language requirements so that gasoline
manufacturers that produce Low-RVP Summer CBOB can accurately and
consistently describe the fuel designation. All other designation and
PTD provisions will still apply (e.g., those designations related to
the blending of ethanol). We believe this approach is the most
straight-forward method for updating the designation and PTD
requirements for Low-RVP Summer CBOB.
B. Regulatory Reinstatement Mechanism
We are finalizing as proposed a regulatory mechanism for States to
request the reinstatement of the 1-psi waiver under CAA section
211(h)(5). This regulatory mechanism will be available for the
petitioning States, as well as any other State for which EPA removes
the 1-psi waiver under CAA section 211(h)(5) in the future. The
regulations provide all States with criteria under which such a request
could be made and granted. We modeled the regulatory mechanism for
reinstatement of the 1-psi waiver on the regulations in 40 CFR 1090.295
that allow for the removal of 7.8 psi RVP standard.\73\ Under the
reinstatement mechanism, we are requiring that the State only has to
request the reinstatement of the 1-psi waiver in order for EPA to
reinstate it; however, if the State has relied on the 1-psi waiver
removal in a SIP, either pending or approved, EPA, in consultation with
the State, must determine if such a SIP must be revised. If a revision
is necessary, the State must revise the SIP and EPA must approve the
revision prior to the effective date of the reinstatement of the 1-psi
waiver. Such requests must include a requested effective date, and any
such effective date must be at least 90 days after EPA's written
notification to the State that their request has been approved.
---------------------------------------------------------------------------
\73\ We are not reopening the regulations associated with
removal of a federal 7.8 psi low-RVP program in a given area (40 CFR
1090.295) or the regulations that allow states to opt-out of the
federal RFG program (40 CFR 1090.290).
---------------------------------------------------------------------------
IX. Removal of the 1-psi Waiver for E15
This action also amends 40 CFR part 1090 to reflect the 2021 court
decision in American Fuel and Petrochemical Manufacturers (AFPM) v.
EPA, 3 F.4th 373 (D.C. Cir. 2021), vacating the 1-psi volatility waiver
for E15 in 40 CFR 1090.215(b)(2). The Administrative Procedure Act, 5
U.S.C. 553(b)(3)(B), provides that, when an agency for good cause finds
that notice and public procedures are impracticable, unnecessary, or
contrary to the public interest, the agency may issue a rule without
providing notice and an opportunity for public comment. EPA has
determined that there is good cause for amending these provisions
without prior proposal and opportunity for public comment because the
correction of 40 CFR part 1090 is a ministerial act to effectuate the
court order and public notice and comment is unnecessary and would
serve no useful purpose. Modification of the regulations to eliminate
the 1-psi waiver for E15 at 40 CFR 1090.215(b)(2) has no legal effect
beyond fulfilling the court's vacatur in AFPM v. EPA and is ministerial
in nature. The court issued its mandate on September 17, 2021, at which
point the vacatur became effective.
A. Background
In June 2019, EPA finalized a rule modifying volatility regulations
for gasoline-ethanol blends containing more than 10 and up to 15
percent ethanol to provide a 1-psi RVP volatility ``waiver.'' The rule
was challenged in the D.C. Circuit by AFPM and other groups in June
2019. The court issued its decision on July 2, 2021, vacating the
volatility rule, and subsequently issued the mandate for its decision
on September 17, 2021.
This action updates our regulations to reflect the court's vacatur
of the volatility rule. Subsequent to the promulgation of the
volatility rule and the corresponding regulations at 40 CFR 80.27, in
December 2020, EPA finalized its fuels regulatory streamlining effort
and transposed the regulations, with minor changes, to 40 CFR
1090.215.\74\ We are now making the necessary amendments to the
regulations at 40 CFR 1090.215 to be consistent with the court's
vacatur.
---------------------------------------------------------------------------
\74\ 85 FR 78412 (December 4, 2020).
---------------------------------------------------------------------------
We are also clarifying the status of the ``substantially similar''
determination for gasoline made in the same action. Because the 2019
interpretative rule \75\ was promulgated solely for the purpose of
providing the 1-psi waiver to E15, and because the court vacated the
entire volatility rule, the 2019 interpretative rule is rescinded.\76\
Thus, the only ``substantially similar'' determinations for gasoline
are: (1) The 1991 interpretative rule,\77\ and (2) The 2008
interpretative rule.\78\
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\75\ 84 FR 26980 (June 10, 2019).
\76\ See 84 FR 26980, 26983 (June 10, 2019) (``In sum, all
actions we are taking today constitute a single, cohesive effort,
and as such we do not intend for any of these individual actions to
be severable'').
\77\ 56 FR 5352 (February 11, 1991).
\78\ 73 FR 22277 (April 25, 2008).
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Finally, in the same rulemaking action, EPA promulgated regulations
related to the RFS credit or ``RIN'' market.\79\ These regulations were
not challenged, were severable from the action to extend the 1-psi
waiver to E15, and remain in place. EPA is noting this for
informational purposes only; we are not reopening these RFS regulations
here.
---------------------------------------------------------------------------
\79\ 84 FR 26980 (June 10, 2019).
---------------------------------------------------------------------------
B. Affected Provisions
This final rule amends the fuel quality regulations at 40 CFR part
1090, subparts C and R, to remove the 1-psi waiver for E15 contained in
40 CFR 1090.215(b)(2) and 1090.1720(e) by replacing the phrases ``15
volume percent'' and ``15 percent'' with ``10 volume percent'' and ``10
percent,''
[[Page 14773]]
respectively. As explained above, removal of the 1-psi waiver for E15
corrects the CFR to conform to the court's order in AFPM v. EPA, has no
legal effect beyond fulfilling the court's vacatur, and is ministerial
in nature. The court issued the mandate for its decision on September
17, 2021, at which point the vacatur became effective.
X. Statutory and Executive Order Reviews
Additional information about these statutes and Executive Orders
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 14094: Modernizing Regulatory Review
This action is a ``significant regulatory action,'' as defined
under section 3(f)(1) of Executive Order 12866, as amended by Executive
Order 14094. Accordingly, EPA submitted this action to the Office of
Management and Budget (OMB) for Executive Order 12866 review.
Documentation of any changes made in response to the Executive Order
12866 review is available in the docket. EPA prepared an analysis of
the potential costs and benefits associated with this action. This
analysis is presented in the TSD, available in the docket for this
action.
B. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. OMB has previously approved the information collection
activities contained in the existing regulations and has assigned OMB
control number 2060-0731. This action removes the 1-psi waiver in eight
States. It does not alter practices used by the existing recordkeeping
and reporting requirements, nor does it change the number or type of
respondents and the manner in which they satisfy the fuel designation
and PTD requirements.
C. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. The
small entities subject to the requirements of this action are small
refiners (which are defined at 13 CFR 121.201) that produce or
distribute gasoline in Illinois, Iowa, Minnesota, Missouri, Nebraska,
Ohio, South Dakota, or Wisconsin. This action removes the 1-psi waiver
for E10 in these States. EPA is not aware of any small refiner that
operates in these States. However, EPA is aware of at least one small
refiner that distributes a portion of the gasoline it produces to some
of the petitioning States, and thus will be affected this action.
Therefore, to evaluate the impacts of this action on small entities, we
have conducted a screening analysis to assess whether we should make a
finding that this action will not have a significant economic impact on
a substantial number of small entities.\80\ Currently available
information shows that the impact on small entities from implementation
of this rule will not be significant. As discussed in Section VII and
the TSD, we expect that refiners, including small refiners, will be
able to recover the cost associated with the removal of the 1-psi
waiver through higher gasoline prices in the petitioning and
surrounding States. Even if we were to assume that the cost of
producing low-RVP CBOB was not recovered by refiners, a cost-to-sales
ratio test shows that the costs to small refiners of the removal of the
1-psi waiver are far less than 1 percent of the value of their sales.
Furthermore, the removal of the 1-psi waiver in these States does not
substantively alter the regulatory requirements on parties that make
and distribute gasoline. We have therefore concluded that this action
will not have any significant adverse economic impact on directly
regulated small entities.
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\80\ See TSD Section 8.
---------------------------------------------------------------------------
D. Unfunded Mandates Reform Act (UMRA)
This action does not contain an unfunded mandate of $100 million or
more as described in UMRA, 2 U.S.C. 1531-1538, and does not
significantly or uniquely affect small governments. This action
implements mandates specifically and explicitly set forth in CAA
section 211(h)(5) and we believe that this action represents the least
costly, most cost-effective approach to achieve the statutory
requirements.
E. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.
F. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have Tribal implications as specified in
Executive Order 13175. This action will be implemented at the State
level and would affect gasoline refiners, blenders, marketers,
distributors, and importers. Tribal governments would be affected only
to the extent they produce, purchase, and use gasoline. Thus, Executive
Order 13175 does not apply to this action.
G. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
EPA interprets Executive Order 13045 as applying only to those
regulatory actions that concern environmental health or safety risks
that EPA has reason to believe may disproportionately affect children,
per the definition of ``covered regulatory action'' in section 2-202 of
the Executive Order. Therefore, this action is not subject to Executive
Order 13045 because it implements specific standards established by
Congress in statutes.
H. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not a ``significant energy action'' because it is
not likely to have a significant adverse effect on the supply,
distribution, or use of energy. This action removes the 1-psi waiver
for eight States. As discussed in Section V, it will require changes to
the production and distribution of gasoline, which is expected to have
some short- and long-term impacts on gasoline supply and cost in the
affected areas, but we believe the market will be able to accommodate
the change without any significant disruption.
I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR
Part 51
This action does not involve technical standards.
J. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations
EPA believes that the human health and environmental conditions
that exist prior to this action do not result in disproportionate and
adverse effects on communities with environmental justice concerns.
Numerous studies have found that environmental hazards such as air
pollution are more prevalent in areas where people of color and low-
income populations represent a higher fraction of the population
compared to the general population. In addition, there is ample
evidence that people who reside in close proximity to major roadways
are disproportionately represented by
[[Page 14774]]
people of color and people with low income.
EPA believes that this action is not likely to result in new
disproportionate and adverse effects on communities with environmental
justice concerns. This is because any emissions impacts of this action
are small. As described in Section IV.B, MOVES modeling performed by
the States in support of their petitions demonstrated a reduction in
VOCs, CO, and NOX, as well as potential increases in
emissions of pollutants such as PM. This action is being implemented at
the request of the Governors of the petitioning States and EPA lacks
discretion to deny such requests as described in Section III.
EPA additionally identified and addressed EJ concerns by providing
the relevant emissions information in this rulemaking action and
providing an opportunity for public comment on this rule. We received
no comments related to EJ concerns.
The information supporting this Executive Order review is contained
in this preamble and the ``Evaluation of MOVES Modeling and Results,''
available in the docket for this action.
K. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action meets the criteria set forth in 5 U.S.C.
804(2).
List of Subjects in 40 CFR Part 1090
Environmental protection, Administrative practice and procedure,
Air pollution control, Fuel additives, Gasoline, Petroleum, Renewable
fuel.
Michael S. Regan,
Administrator.
For the reasons set forth in the preamble, EPA amends 40 CFR part
1090 as follows:
PART 1090--REGULATION OF FUELS, FUEL ADDITIVES, AND REGULATED
BLENDSTOCKS
0
1. The authority citation for part 1090 continues to read as follows:
Authority: 42 U.S.C. 7414, 7521, 7522-7525, 7541, 7542, 7543,
7545, 7547, 7550, and 7601.
Subpart C--Gasoline Standards
0
2. Amend Sec. 1090.215 by:
0
a. In paragraph (b)(2), removing the text ``than 15'' and adding in its
place the text ``than 10''; and
0
b. Revising paragraph (b)(3).
The revision reads as follows:
Sec. 1090.215 Gasoline RVP Standards.
* * * * *
(b) * * *
(3)(i) RFG and SIP-controlled gasoline that does not allow for the
ethanol 1.0 psi waiver does not qualify for the special regulatory
treatment specified in paragraph (b)(1) of this section.
(ii) Gasoline subject to the 9.0 psi maximum RVP per-gallon
standard in paragraph (a)(1) of this section in the following areas is
excluded from the special regulatory treatment specified in paragraph
(b)(1) of this section:
Table 2 to Paragraph (b)(3)(ii)--Areas Excluded From the Ethanol 1.0 psi
Waiver
------------------------------------------------------------------------
State Counties Effective date
------------------------------------------------------------------------
Illinois........................ All.......... April 28, 2025.
Iowa............................ All.......... April 28, 2025.
Minnesota....................... All.......... April 28, 2025.
Missouri........................ All.......... April 28, 2025.
Nebraska........................ All.......... April 28, 2025.
Ohio............................ All.......... April 28, 2025.
South Dakota.................... All.......... April 28, 2025.
Wisconsin....................... All.......... April 28, 2025.
------------------------------------------------------------------------
* * * * *
0
3. Add Sec. 1090.297 to read as follows:
Sec. 1090.297 Procedures for reinstating the 1.0 psi RVP allowance
for E10.
(a) EPA may approve a request from a State asking to reinstate the
ethanol 1.0 psi waiver specified in Sec. 1090.215(b)(1) for any area
(or portion of an area) specified in Sec. 1090.215(b)(3)(ii) if it
meets the requirements of paragraph (b) of this section. If EPA
approves such a request, an effective date will be set as specified in
paragraph (c) of this section. EPA will notify the State in writing of
EPA's action on the request and the effective date of the reinstatement
upon approval of the request.
(b) The request must be signed by the Governor of the State, or the
Governor's authorized representative, and must include all the
following:
(1) A geographic description of each area (or portion of such area)
that is covered by the request.
(2) A description of all the means in which emissions reduction
from the removal of the ethanol 1.0 psi waiver are relied upon in any
approved SIP or in any submitted SIP that has not yet been approved by
EPA, if applicable.
(3) For any area covered by the request where emissions reductions
from the removal of the ethanol 1.0 psi waiver are relied upon as
specified in paragraph (b)(2) of this section, the request must include
the following information:
(i) Identify whether the State is withdrawing any submitted SIP
that has not yet been approved.
(ii)(A) Identify whether the State intends to submit a SIP revision
to any approved SIP or any submitted SIP that has not yet been
approved, which relies on emissions reductions from the removal of the
ethanol 1.0 psi waiver, and describe any control measures that the
State plans to submit to EPA for approval to replace the emissions
reductions from the removal of the ethanol 1.0 psi waiver.
(B) A description of the State's plans and schedule for adopting
and submitting any revision to any approved SIP or any submitted SIP
that has not yet been approved.
(iii) If the State is not withdrawing any submitted SIP that has
not yet been approved and does not intend to submit a revision to any
approved SIP or any submitted SIP that has not yet been approved,
describe why no revision is necessary.
(4) A requested effective date of the reinstatement of the ethanol
1.0 psi waiver.
(5) The Governor of a State, or the Governor's authorized
representative, must submit additional information needed to administer
the reinstatement of the ethanol 1.0 psi waiver upon request by EPA.
(c)(1) Except as specified in paragraph (c)(2) of this section, EPA
will set an effective date of the reinstatement of the ethanol 1.0 psi
waiver as requested by the Governor, or the Governor's authorized
representative, but no less than 90 days from EPA's written
notification to the State approving the reinstatement request.
(2) Where emissions reductions from the removal of the ethanol 1.0
psi waiver are included in an approved SIP or any submitted SIP that
has not yet been approved, EPA will set an effective date of the
reinstatement of the ethanol 1.0 psi waiver as requested by the
Governor, or the Governor's authorized representative, but no less than
90 days from the effective date of EPA approval of the SIP revision
that removes the emissions reductions from the ethanol 1.0 psi waiver,
and, if necessary, provides emissions reductions to make up for those
from the ethanol 1.0 psi waiver reinstatement.
(d) EPA will publish a document in the Federal Register announcing
the approval of any ethanol 1.0 psi waiver reinstatement request and
its effective date.
(e) Upon the effective date for the reinstatement of the ethanol
1.0 psi waiver in a subject area (or portion of a subject area)
included in an approved
[[Page 14775]]
request, the ethanol 1.0 psi waiver will apply in such subject area.
Subpart K--Batch Certification and Designation
0
4. Amend Sec. 1090.1010 by redesignating paragraph (a)(2)(iii) as
(a)(2)(iv) and adding a new paragraph (a)(2)(iii) to read as follows:
Sec. 1090.1010 Designation requirements for gasoline and regulated
blendstocks.
(a) * * *
(2) * * *
(iii) If the CBOB is excluded from the special regulatory treatment
for ethanol under Sec. 1090.215(b)(3)(ii), Low-RVP Summer CBOB.
* * * * *
Subpart L--Product Transfer Documents
0
5. Amend Sec. 1090.1110 by redesignating paragraph (b)(2)(i)(C) as
(b)(2)(i)(D) and adding a new paragraph (b)(2)(i)(C) to read as
follows:
Sec. 1090.1110 PTD requirements for gasoline, gasoline additives, and
gasoline regulated blendstocks.
* * * * *
(b) * * *
(2) * * *
(i) * * *
(C) ``Low-RVP CBOB. This product does not meet the requirements for
summer reformulated gasoline.''
* * * * *
Subpart R--Compliance and Enforcement Provisions
Sec. 1090.1720 [Amended]
0
6. Amend Sec. 1090.1720, in paragraphs (e) introductory text and
(e)(2), by removing the text ``15 percent'' and adding in its place the
text ``10 percent''.
[FR Doc. 2024-04023 Filed 2-28-24; 8:45 am]
BILLING CODE 6560-50-P